Kathmandu, May 6: After years of watching their money vanish into cooperative black holes, depositors might finally see something come back. The government says refunds for savings trapped in troubled cooperatives will start from mid-May, kicking off in the first week of Jestha.
The Problematic Cooperative Management Committee, formed on April 22, has already gathered data on affected institutions and depositors. Authorities estimate around Rs. 46 billion must be returned to roughly 76,000 people. Most fall into the “small depositor” category, meaning they saved less than Rs. 500,000. Only about 18,000 depositors exceed that threshold.
Officials plan to begin repayments soon, with smaller depositors at the front of the line. Priority will also go to vulnerable groups, including single women, senior citizens, Dalits, indigenous communities, and persons with disabilities. The committee intends to roll out payments while continuing to chase loan recoveries, a process that has historically moved at the speed of a reluctant buffalo.
A second claims window will open in the third week of May for those who missed the initial deadline. Refunds will be processed based on official records, including balances recorded just before a cooperative was declared problematic.
Funding for repayments will come through a revolving pool. This fund will combine government allocations, money recovered from cooperatives, and proceeds from asset seizures. If internal resources fall short, the government may step in with loans to keep the process moving.
Recovery efforts won’t be gentle. Assets belonging to those responsible for mismanagement, including directors, managers, and committee members, will be auctioned. If that still doesn’t cover the losses, authorities can go after properties transferred to family members, even if those transfers happened through divorce settlements or inheritance. In other words, hiding money under your cousin’s name might not work out so well.
Not everyone gets paid at once. Depositors with outstanding loans must clear their dues before claiming refunds. Meanwhile, individuals linked to misappropriation, along with their immediate families, will be last in line. Cases stuck in court will also delay payouts until legal proceedings conclude.
If funds run dry, remaining money will be distributed proportionally among claimants. In cases where depositors have died or cannot be located, payments will go to verified heirs.
This entire mess didn’t appear overnight. Despite being recognized as a pillar of the national economy, Nepal’s cooperative sector spent decades operating with weak oversight. Over the past ten years, major scandals exposed widespread embezzlement and fake audits. A parliamentary probe in 2024 found nearly Rs. 87.89 billion had been misused across at least 40 cooperatives.
The Supreme Court of Nepal stepped in earlier this year, directing the government to prioritize small depositors. Shortly after, the Cooperative (First Amendment Ordinance) cleared the way for public funds to be used in repayments.
Now the government faces the real test: turning promises into actual payments. Depositors have heard plans before. This time, they’ll be watching for money, not words.
People’s News Monitoring Service
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