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New cooperative policy will be introduced next week: FinMin

KAVRE, DEC 29 -

The government plans to unveil a new cooperative policy within a week. This was revealed by Finance Minister Barsha Man Pun while inaugurating the Cooperative Festival in Banepa, Kavrepalanchowk, on Saturday.

“The National Cooperative Policy 2069 will be issued within a week,” said Pun, adding the new policy would better manage the cooperative sector. Amid reports about bad practices in cooperatives, Pun said the government would take measures to control such anomalies.

The new policy talks about better regulation of the sector that is currently poorly regulated. Some of the features of the new police include strengthening the monitoring involving the central cooperatives association and expanding investment avenues. With the surge in the number of agriculture cooperatives, the new policy also aims to promote such cooperatives. Stakeholders have long been demanding a new, updated policy amid surge in the number of cooperatives that have collected a huge amount of deposits. Luring the general public by offering higher interest rates, cooperatives have become the second highest deposit collector after commercial banks.

The latest statistics show deposits in cooperatives are much higher than those in development banks and finance companies.

After large cooperatives faced liquidity crisis, stakeholders concerned have recently formed a broad committee to initiate a study on troubled cooperatives. The High-Level Cooperative Strengthening Committee includes representatives from the National Cooperatives Federation (NCF), Department of Cooperatives (DoC), Nepal Federation of Saving and Credit Cooperative Union (NEFSCUN) and National Cooperative Bank (NCB), among others.

The committee led by NCF President Keshav Badal will carry out a comprehensive study on troubled cooperatives, including Oriental, Guna and Exim, and propose corrective measures.

The committee will coordinate with the Ministry of Cooperatives and Poverty Alleviation, Finance Ministry and Nepal Rastra Bank for the study. The panel will also hold discussions with the executives of troubled cooperatives.

With increasing incidents of cooperatives misusing depositors’ money, the DoC is also planning to control interest rates offered by cooperatives on deposits. In general, cooperatives offer higher rates than banks.

The DoC is considering fixing interest rates offered by cooperatives on deposits in line with those offered by commercial banks. The move, according to the DoC, is aimed at curbing cooperatives’ lending to non-productive sectors.

 

Posted on: 2012-12-30 08:49


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