The Department of Cooperatives has been hamstrung in its move to regulate the cooperatives in the country due to a delay in issuing a full-fledged budget, lack of skilled human resources and insufficient legal authority.
The department said that it had been struggling to implement the 60-point work plan forwarded by the Ministry of Finance. The ministry had recently prepared a 60-point work plan and asked the department to work in cooperation with Nepal Rastra Bank. The work plan is the outcome of a study jointly carried out by the Finance Ministry, Nepal Rastra Bank and the Department of Cooperatives.
Following last year’s liquidity crunch, the government had suspected that a huge amount of money might have been deposited in poorly monitored cooperatives because of the requirement to disclose income sources for land transactions and deposits of more than Rs. 1 million made in banks and financial institutions.
The study showed that most of the cooperatives had accepted fixed deposits for up to five years that involved opening a current account. They were also found to be issuing loans against gold and silver as collateral in violation of the law.
Some cooperatives were being run as family businesses when the rules don’t allow multiple members of a family to be board members. Most cooperatives were found to have collected deposits amounting to 20-60 percent of their issued capital when the new regulations say that deposit collection should not exceed 10 percent. According to the work plan, cooperatives should limit their spread rate to 6 percent. Similarly, lending per borrower should not exceed 10 percent of the capital fund. Moreover, cooperatives are permitted to carry out transactions only with the members of their authorised areas.
Registrar of the Department of Cooperatives Sudarshan Prasad Dhakal said that cooperatives could not be monitored effectively due to a shortage of resources including manpower. Though there are two experts from Nepal Rastra Bank, the department said it was difficult to implement the work plan because of an inadequate budget. The government had granted Rs. 600,000 to the department last year. “The available resources are not enough to monitor the cooperatives which number almost 20,000,” said Dhakal.
There are 19,924 cooperatives in the country including savings and credit, multi-purpose, dairy, agriculture and consumer cooperatives. Among them, around 23 percent are concentrated in the Kathmandu Valley. According to the Department of Cooperatives, they hold deposits worth Rs. 65 billion. However, Finance Ministry officials said that deposit collection should be much higher than that.
source:ekantipur
The department said that it had been struggling to implement the 60-point work plan forwarded by the Ministry of Finance. The ministry had recently prepared a 60-point work plan and asked the department to work in cooperation with Nepal Rastra Bank. The work plan is the outcome of a study jointly carried out by the Finance Ministry, Nepal Rastra Bank and the Department of Cooperatives.
Following last year’s liquidity crunch, the government had suspected that a huge amount of money might have been deposited in poorly monitored cooperatives because of the requirement to disclose income sources for land transactions and deposits of more than Rs. 1 million made in banks and financial institutions.
The study showed that most of the cooperatives had accepted fixed deposits for up to five years that involved opening a current account. They were also found to be issuing loans against gold and silver as collateral in violation of the law.
Some cooperatives were being run as family businesses when the rules don’t allow multiple members of a family to be board members. Most cooperatives were found to have collected deposits amounting to 20-60 percent of their issued capital when the new regulations say that deposit collection should not exceed 10 percent. According to the work plan, cooperatives should limit their spread rate to 6 percent. Similarly, lending per borrower should not exceed 10 percent of the capital fund. Moreover, cooperatives are permitted to carry out transactions only with the members of their authorised areas.
Registrar of the Department of Cooperatives Sudarshan Prasad Dhakal said that cooperatives could not be monitored effectively due to a shortage of resources including manpower. Though there are two experts from Nepal Rastra Bank, the department said it was difficult to implement the work plan because of an inadequate budget. The government had granted Rs. 600,000 to the department last year. “The available resources are not enough to monitor the cooperatives which number almost 20,000,” said Dhakal.
There are 19,924 cooperatives in the country including savings and credit, multi-purpose, dairy, agriculture and consumer cooperatives. Among them, around 23 percent are concentrated in the Kathmandu Valley. According to the Department of Cooperatives, they hold deposits worth Rs. 65 billion. However, Finance Ministry officials said that deposit collection should be much higher than that.
source:ekantipur
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