Govt move to amend cooperatives regulation draws criticism

KATHMANDU, AUG 14 -

The government ’s move to amend the Cooperative Regulation 1992 has drawn flak from the stakeholders.

On Tuesday, various associations related to the cooperatives sector submitted a memorandum to the government , urging the latter not to amend the regulation. They said the amendment could affect the entire cooperatives movement, rather than monitoring those cooperatives involved in misconduct.

The associations said they would not accept the amended regulation if enforced without holding consultations with them. “It will be better if the Ministry of Cooperatives and Poverty Alleviation (MoCPA) takes consent from cooperatives associations while amending the regulation,” said Khem Pathak, president of the Agriculture Cooperatives Association.

The government had a formed five-member committee led by Joint Secretary at the Prime Minister’s Office to amend the regulation 10 days ago. The committee recently submitted the draft of the amended regulation to the Law Ministry. Other members of the committee include under secretaries of MoCPA, Law Ministry and registrar of the Department of Cooperatives.

Pathak said the new regulation talks about not allowing shareholders to deposit more than 10 times the amount of shares they hold in a cooperative. “The regulation also talks about barring executive of a cooperative to hold the same position in other cooperatives,” said Pathak.

He also said amending the regulation without introducing a new cooperatives act would be futile. “As the Cooperatives Act-1992 could not address many contemporary issues, there is no meaning of introducing a new regulation without amending the old act,” he said, accusing the government of not being able to take action against cooperatives failing to pay back depositors’ money.

There are more than 26,000 cooperatives operating in the country, and 28 of the savings and credit cooperatives have so far been declared troubled. Cooperatives including Oriental, Guna, Ugrachandi and Corona, among others, have failed to pay back their depositors’ money.

MoCPA, however, termed the protest “meaningless”. MoCPA Spokesperson Ram Krishna Subedi said they were introducing the regulation just to address the problems seen in the sector.

Source: The Kathmandu Post