Cooperative depositors still await refunds despite Rs 650 million relief fund

Efforts to repay depositors of troubled cooperatives in Nepal have so far brought limited relief, according to reports by Nagarik News, Republica and Onlinekhabar. The Problematic Cooperative Management Committee says about 76,000 depositors are owed nearly Rs 46 billion. The government has set up a revolving relief fund and Nepal Rastra Bank has extended its inspection team's term at the cooperative regulator, but some depositors say they have so far got back no more than Rs 5,000.

Central bank team's inspection term extended

Onlinekhabar reported that the Nepal Rastra Bank (NRB) team deputed to the National Cooperative Authority has had its term extended by a further three months. In its first three months, the 10-member team led by NRB Deputy Director Geja Pangeni inspected 16 cooperatives: special inspections of four and intensive regulation and supervision of 12. According to the report, the supervision found cooperatives lending more than 15 percent of primary capital to a single person, lending without collateral, paying commissions to collect savings, and directors taking large loans themselves. Pangeni said the team is passing supervisory experience and knowledge on to the authority. An NRB official said it is not certain when the team will return to the bank, because it stays for as long as the authority needs it.

A relief fund with a limited reach

Nagarik News and Republica reported that the revolving relief fund holds Rs 650 million: Rs 250 million from the government and Rs 400 million from cooperative operators, with money recovered from cooperatives' loans to be added. The government says it has begun returning money to depositors of problematic cooperatives. Its policy and programme and budget for fiscal year 2083/84 (2026/27), announced in May, pledged to return deposits of up to Rs 500,000. Some depositors say they have received no more than Rs 5,000 so far, and no clear timeline has been announced for full repayment.

According to the Problematic Cooperative Management Committee, about 76,000 depositors are owed nearly Rs 46 billion by the cooperatives under its jurisdiction, and about 11,000 have received full or partial payments or adjustments. The federal government has declared 23 cooperatives problematic, and the relief programme is centred on them. Victims say hundreds of other cooperatives that cannot return savings should be declared problematic as well; depositors in those cooperatives remain outside the relief process. The fund depends mainly on recovering loans and selling assets, which the reports say can take a long time.

Complaints and enforcement

Nagarik News and Republica reported that Radha Pathak, a depositor in Lalitpur, has yet to recover her savings months after a district court ruled in her favour in a case filed by the government attorney's office.

The Bagmati Province Cooperative Registrar's Office regulates most cooperatives in Kathmandu Valley. Registrar Yadavnath Acharya said that, of the cooperatives whose depositors have applied for refunds, the office has recommended only five to the ministry to be declared problematic. He said other applications are being processed, and that some have come back from the ministry because documents were missing. The reports say regulators mainly register applications, collect missing documents and pursue loan recovery, and have so far not secured refunds for victims.

Pratibha Rawal, the Minister of Land Management, Cooperatives, Federal Affairs and General Administration, has said the government will not walk away from the problem. According to the reports, discussions are under way on dedicated police desks and special court benches to make investigation and hearings of cooperative cases more effective. It is still not settled when money will reach depositors' accounts.