Government restricts registration, service expansion of saving and credit cooperatives

Kathmandu, Nov 24: The government has disallowed registration, service expansion and establishment of service centre for cooperatives of any nature.

The Ministry of Land Management, Cooperatives and Poverty Alleviation has urged relevant authorities concerned to endorse the decision of the Council of Ministers to suspend the registration, service expansion and permission of service centres related to cooperatives, particularly to those meant for saving and credit services, until further provisions are made.

As said by Ministry Spokesperson Ganesh Prasad Bhatta, recent developments in cooperative sector is likely to have adverse effects in the overall financial sector and it was decided to put restrictions on saving and credit cooperative business through the Cabinet decision on November 9.

According to the Ministry, there is a concerning trend among many saving and credit cooperatives which are in significant numbers across the country to accept huge deposits and invest in high-risk sectors.

Similarly, the cooperative sector is grappling with a financial crisis as members and depositors are facing challenges in retrieving their savings. ---