Kathmandu, April 27: The government has decided to set up a revolving fund to return savings of depositors from cooperatives declared problematic. The new mechanism aims to ensure repayment through a structured recovery system involving state support.
The Ministry of Land Management, Cooperatives and Poverty Alleviation has issued the “Operational Procedure for Establishment and Operation of Revolving Fund for Return of Savings of Members of Problematic Cooperatives, 2083”, which has been published in the Gazette and brought into force.
The fund will operate under the Problematic Cooperative Management Committee, in line with the Cooperative Act 2074 and the government’s current fiscal policy and budget provisions.
According to the procedure, the fund will be financed through multiple sources, including allocations from the Government of Nepal, proceeds from the sale of cooperative assets, recovery from borrowers, and liquidation of assets of accused officials or employees involved in financial irregularities.
Assets belonging to board members, managers, audit committee members, and their immediate family members will be frozen if they are found involved in misappropriation. Such assets can be auctioned to repay depositors. If family members fail to prove separation through partition documents, their property may also be used to settle liabilities.
Depositors who have filed claims under Section 112 (a) of the Cooperative Act will receive refunds through bank accounts, ensuring no duplication of claims. The balance recorded in official or computer systems before the declaration of a cooperative as problematic will be taken as the basis for repayment.
If a depositor has taken loans from the same cooperative, their savings will not be released until the loan is cleared. Similarly, savings of officials, employees, and their families involved in irregularities will be withheld until liability settlement is completed. Cases under court review will be settled only after final verdicts.
The framework prioritises small savers with deposits up to Rs 500,000. It also gives priority to single women, senior citizens above 60, Dalits, Indigenous communities, and persons with disabilities.
If a depositor has savings in multiple problematic cooperatives, repayment will initially be limited to one institution. In case the fund is insufficient compared to total claims, payments may be distributed proportionally.
Borrowers and depositors may also settle accounts through mutual agreement by applying to the management committee. Once payments are made, the cooperative’s liability will be recorded as a loan from the fund, which will later be recovered through asset sales and recovery actions.
The government has stated that repayments from the fund will be recovered from cooperative assets or from individuals responsible for misappropriation. If recovery from cooperative assets is insufficient, government dues may be enforced against the personal property of those involved and their families.
People’s News Monitoring Service
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