Prez to govt: Heed co-op panel’s advice

KATHMANDU, JUL 02 -

President Ram Baran Yadav on Tuesday urged the government to implement the get-tough recommendation of the high-level probe commission formed to examine troubled cooperatives and impose sterner punishment on crooks.

Speaking at the inauguration of the new office building of National Cooperatives Federation of Nepal (NCFN), the President said that the cooperative sector needed to be regulated properly as troubled co-ops held a huge amount of public deposits.

“Savings and credit cooperatives in particular should be regulated in the same way other banking institutions are regulated,” said the President. The Cooperative Act which is more concerned with promoting cooperatives than penalizing wrongdoers has been blamed for the problems that have emerged in the sector.

The probe commission led by the former chairman of the Special Court Gauri Bahadur Karki has suggested passing a new Cooperative Act with strong provisions for penalty.

The panel has recommended jail terms of four months to 20 years for those involved in embezzling the people’s money. It has urged the government to form two powerful bodies—a rehabilitation commission and a deposit and credit tribunal—to resolve the existing problems in the sector. The probe commission found out that the promoters and directors of troubled cooperatives had misappropriated Rs 11.41 billion in deposits including interest as per the 12,962 complaints received.

President Yadav said that although the Interim Constitution had named cooperatives as one of the pillars of the national economy, a number of them involved in banking transactions had failed to operate as per the rules. He urged the government to formulate and implement the necessary laws to bring the sector into a strict regulatory framework.

Speaking at the same function, Finance Minister Ram Sharan Mahat said that problems had arisen in the sector as rich people opened cooperatives with the aim of enriching themselves and not raising the living standard of the poor. He added that although cooperatives had been envisaged to promote productive sectors, they could not enter a large segment of the productive sector of the economy.

Mahat urged cooperatives to play a significant role in sustainable development by preserving the environment and strengthening the social and economic status of the people. Similarly, giving an example of the successful cooperative business in neighbouring countries, Chief Secretary Lila Mani Paudel said there was a need for effective monitoring by developing an institutional mechanism to control the growing anomalies in the sector.

Speaking at the programme, NCFN President Keshab Badal said they planned to promote investment in the country through cooperatives . Badal added that the federation’s new building had been constructed at a cost of Rs 60 million.

Source: The Kathmandu Post