Govt to keep a close tab on cooperatives

KATHMANDU, JUL 26 -

The Ministry of Cooperatives and Poverty Alleviation has begun preparing a working guideline to make its monitoring of cooperatives more effective.

There are around 25,000 cooperatives operating in the country. As of the first half of the last fiscal year, they had collected Rs 124.9 billion in deposits from their 3.4 million members, according to Economic Survey 2011-12. Among them, 11,392 are savings and credit cooperatives with deposits totalling Rs 101 billion.

However, due to lack of an effective monitoring system, many of these cooperatives have been found to be involved in financial irregularities which has put the deposits held by them at risk. The ministry has moved to strengthen monitoring of the cooperatives amid mounting calls to keep a sharper eye on them. Ministry spokesman Sudarshan Prasad Dhakal said the proposed working guideline would lay down rules on monitoring the sector. The ministry has formed a taskforce to formulate the regulations.

The six-member team headed by the ministry’s under secretary includes representatives from Nepal Rastra Bank, the Department of Cooperatives and the Nepal Federation of Savings and Credit Cooperative Unions. The taskforce has been assigned to submit a report on the monitoring mechanism by next week.

According to the Department of Cooperatives, it has been cross-checking only around 100 cooperatives annually due to lack of resources and rules. The department has directed savings and credit cooperatives with annual transactions of more than Rs 10 million to submit monthly financial reports.

Source: The Kathmandu Post