Govt to ban advertisement of cooperatives soon

KATHMANDU, FEB 21:

The government is planning to ban advertisements of cooperatives in the backdrop of increasing number of frauds in the sector. The Department of Cooperatives has drafted a directive to control advertisement being done through sign boards and hoarding boards.

Savings and credit cooperatives will not be allowed to advertise their deposit schemes and interest rates according to new directive. “This step will control the way in which depositors are attracted towards cooperatives and minimise fraud,” said registrar of department Kedar Neupane. Savings and credit cooperatives have swindled over Rs one billion in last 10 years and over Rs five billion is a risk at the moment.

The new directive, that will replace the Cooperatives Registration and Monitoring Standard 2011, has set a standard for sign boards too. According to Neupane, cooperatives will not be allowed to put up sign boards that are larger than ‘4x2 foot’ in size.

“We believe that this size is enough to inform people about the office,” he said, adding cooperatives are member-based organisations and their area is limited to specific locations.

According to Cooperative Act 1992, they can work within a village development committee or five wards in municipalities or a metropolis. It also cannot collect deposits and lend to people who are not members.

However, cooperatives have been advertising about their identity through sign boards and hoarding boards. They have been hanging large sign boards and hoarding boards mentioning various schemes and interest rates. “It will not be permitted once directive is passed by the Ministry of Cooperatives and Poverty Alleviation,” said Neupane. “The department will take action against those who violate this provision once it has been enacted.”

Savings and credit cooperatives had adopted the sign board and hoarding board advertisement technique after the government banned advertisements in media — radio, FM, television and newspapers — in 2007. “Now we are focusing on sign boards and hoarding boards too.”

The new rule will permit cooperatives to only mention name, location and registration number in hoarding boards. The sign boards must also be in green and writing in white ink. There are more than 26,500 cooperatives in operation in the country and about 12,000 are savings and credit cooperatives. Savings and credit cooperatives have deposits of around Rs 150 billion and have invested about Rs 141 billion.

Source: THT