DoC to monitor co-ops closely from next FY
KATHMANDU, JUN 01 -
The Department of Cooperatives (DoC) is planning to conduct more stringent monitoring of savings and credit cooperatives from the next fiscal year as their imprudent lending practice has put people’s savings at risk.
Responding to frequent criticism that the DoC has not been keeping a close watch on cooperatives, it is now working to set up teams to carry out effective monitoring.
The DoC has been hindered from monitoring the functioning of all the cooperatives due to lack of human resources. As per the statistics of the DoC, there are more than 8,500 savings and credit cooperatives among the 20,000 plus cooperatives in the country. The DoC and its division offices have a staff of 594, and most of them are not highly skilled.
According to the DoC, each monitoring team will involve at least three members including a lawyer, a chartered accountant and a DoC official. DoC registrar Sudarshan Prasad Dhakal said the department would hire the required number of professionals on a regular basis from next year to make its monitoring effective.
“The number and size of the monitoring teams may vary depending on the budget allocated by the government,” Dhakal added. “The department has asked the government to increase its annual budget to Rs 410 million from Rs 350 million.”
Dhakal said that the teams would be formed after a proposed new act governing savings and credit cooperatives is enforced. The planned act will empower the DoC to regulate cooperatives and penalize those violating its directives and exposing their members and depositors to risk.
A study of 40 savings and credit cooperatives done jointly by the DoC, the Finance Ministry and Nepal Rastra Bank revealed that about half of them were found to be engaged in risky practices.
The DoC has tied up with the Institute of Chartered Accountants of Nepal to examine the audit reports submitted by savings and credit cooperatives. It is also implementing a long form audit report system to monitor their financial status from next year, Dhakal said. Many large savings and credit cooperatives with annual transactions worth more than Rs 10 million are behind in submitting their monthly financial reports.
Source: Kantipur
The Department of Cooperatives (DoC) is planning to conduct more stringent monitoring of savings and credit cooperatives from the next fiscal year as their imprudent lending practice has put people’s savings at risk.
Responding to frequent criticism that the DoC has not been keeping a close watch on cooperatives, it is now working to set up teams to carry out effective monitoring.
The DoC has been hindered from monitoring the functioning of all the cooperatives due to lack of human resources. As per the statistics of the DoC, there are more than 8,500 savings and credit cooperatives among the 20,000 plus cooperatives in the country. The DoC and its division offices have a staff of 594, and most of them are not highly skilled.
According to the DoC, each monitoring team will involve at least three members including a lawyer, a chartered accountant and a DoC official. DoC registrar Sudarshan Prasad Dhakal said the department would hire the required number of professionals on a regular basis from next year to make its monitoring effective.
“The number and size of the monitoring teams may vary depending on the budget allocated by the government,” Dhakal added. “The department has asked the government to increase its annual budget to Rs 410 million from Rs 350 million.”
Dhakal said that the teams would be formed after a proposed new act governing savings and credit cooperatives is enforced. The planned act will empower the DoC to regulate cooperatives and penalize those violating its directives and exposing their members and depositors to risk.
A study of 40 savings and credit cooperatives done jointly by the DoC, the Finance Ministry and Nepal Rastra Bank revealed that about half of them were found to be engaged in risky practices.
The DoC has tied up with the Institute of Chartered Accountants of Nepal to examine the audit reports submitted by savings and credit cooperatives. It is also implementing a long form audit report system to monitor their financial status from next year, Dhakal said. Many large savings and credit cooperatives with annual transactions worth more than Rs 10 million are behind in submitting their monthly financial reports.
Source: Kantipur
