Report of ‘Commission of Inquiry into Irregularities in Cooperatives, 2082’ made public, conclusion that public trust has been lost due to weak regulation

Kathmandu. It has come to light that public trust in cooperatives is weakening due to financial irregularities, misuse of savers’ money and weak regulation.

The report of the Commission of Inquiry on Irregularities in Cooperatives, 2082 released by the government has come to this conclusion.

The report states that although the cooperative sector is an important base of economy under the three-pillar economic policy envisioned by the Constitution of Nepal, the public trust in the cooperatives has weakened due to financial irregularities, misuse of savers’ money and weak regulation in the cooperative sector.

According to the report, the cooperatives have been found to have been granted permission for registration, expansion of jurisdiction and addition of service centres and branches without adhering to adequate study, needs analysis and standards. The Commission has concluded that many cooperatives are facing problems due to serious shortcomings in such decision-making processes.

The commission has also stated that some cooperatives and managers have deviated from the main objective of the cooperative, embezzled the money of the savers, carried out non-transparent transactions and activities centered on personal interests.

The report states that weak regulation in the past, haphazard registration and expansion of jurisdiction, political affiliation of cooperatives and managers, and direct or indirect political interference have contributed to the current crisis.

Lack of coordination among multiple regulatory bodies, lack of effective information system, financial indiscipline, lack of good governance and lack of skilled human resources are the major problems in the cooperative sector, according to the NHRC.

The NHRC has suggested that the government should immediately prioritise the creation of an effective and integrated regulatory structure, development of reliable information system, strict good governance, protection of interest of savers and institutional capacity enhancement.

Releasing the report, Minister for Land Management, Cooperatives, Federal Affairs and General Administration Pratibha Rawal expressed her commitment to intensify efforts for policy, institutional and behavioral reforms for the reform of the cooperative sector.

Minister Rawal said that the government has been working to make the cooperative monitoring and regulation, amend the Cooperative Act and Regulations as per the time and make the loan recovery and savings withdrawal process more effective and result-oriented with the goal of making the cooperative sector credible, transparent, accountable and member-centered.

The ministry has said that the government is committed to ending the anomalies existing in the cooperative sector through the effective implementation of the recommendations and suggestions given by the Commission.