Kathmandu- The Ministry of Land Management, Cooperatives and Poverty Alleviation is preparing to establish a revolving fund with seed capital of Rs 250 million to refund savings to victims of troubled cooperatives. The ministry has requested the Ministry of Finance to allocate the required amount for the fund.
The ministry has already prepared the necessary procedures for operating the revolving fund and returning deposits to affected savers. According to Joint Secretary and ministry spokesperson Ganesh Prasad Bhatta, the refund process will begin once the fund receives financial resources, based on documents submitted by victims.
The ministry stated that small depositors will be prioritized in the initial phase. Funds recovered from auctioning assets of the concerned cooperatives will be deposited back into the revolving fund to maintain financial resources.
According to the ministry, the initiative aims to ensure state support and relief for families affected by cooperative fraud. As the fund’s resources increase gradually, plans are in place to return deposits of larger savers in later phases as well.
The ministry noted that cooperatives operating in line with cooperative principles and values have performed well, while many institutions that collected deposits in an unmanaged manner and issued risky loans have fallen into crisis.
Victims who have been unable to recover their savings have formed various committees and launched nationwide campaigns demanding refunds and legal action against cooperative operators accused of fraud.
The government has prioritized resolving problems in the cooperative sector. Around 11,600 savings and credit cooperatives are currently undergoing registration procedures under the National Cooperative Regulatory Authority.
The authority has been working to make the cooperative sector more organized, transparent, and reliable by registering and licensing cooperatives across the country. However, the ministry said regulation has become challenging because cooperatives are registered separately under the three tiers of government.
