Ministry to prepare guidelines to protect deposits with co-ops
KATHMANDU, FEB 05 -
The Ministry of Cooperatives and Poverty Alleviation (MoCPA) has been working to formulate a working guideline for a deposit security fund, credit security fund and credit information centre.
A Cabinet meeting held recently directed the ministry to speed things up with the guideline which has been planned with the aim of protecting money held by savings and credit cooperatives. Following the government order, the MoCPA has been working on an insurance scheme for deposits with savings and credit cooperatives and establishing a credit information centre. MoCPA spokesperson Sudarshan Dhakal said the government had given the responsibility to the ministry .
According to Dhakal, the MoCPA will formulate three separate working guidelines to address the security of deposits held by cooperatives, their lending and the provision for the credit information centre. “We are holding discussions on whether to assign private organisations or to establish a separate unit in the ministry to carry out the work,” he said.
The ministry has planned to set up a contributory fund to insure deposits and lending of cooperatives. “Besides the government, savings and credit cooperatives will also have to contribute a certain percentage of their total deposits to set up the fund,” said Dhakal.
Earlier, in a draft of the Financial Cooperatives Regulation 2012 prepared by the MoCPA, it had proposed making cooperatives contribute 0.5 percent of their deposits to set up the fund. Similarly, it had proposed initiating central cooperative unions to set up the credit information centre.
The MoCPA has also planned to start work on establishing the credit information centre soon. According to Dhakal, they will hold talks with private companies for developing the required software for the purpose.
The provision is expected to help cross check the credit history of loan applicants. “It will help reduce the number of defaulters in the sector thereby protecting the people’s money,” he said.
Source: The Kathmandu Post
