KATHMANDU, AUG 13, 2012
Despite concerns about poor regulation, the cooperatives have proved to be important players in the country’s financial market with annual transactions worth around Rs 280 billion in the last fiscal year.
According to the Department of Cooperatives (DoC), cooperatives have held deposit of Rs 125 billion, lending of Rs 133 billion and share capital of Rs 22 billion. There are a total of 25,353 cooperatives across the country as of Mid April 2012. As of first 11 months of the last fiscal year, the cooperatives collected 12.84 percent of the total deposits Rs 973 billion in the banking system.
Speaking at an annual review meeting, DoC Registrar Kedar Neupane said that cooperatives’ role in helping people, mainly in the rural areas, to uplift their living standards has attracted a growing number of people towards them.
Considering their role in poverty alleviation, the government has also established a separate ministry to look after the cooperatives. They have been recognised as one of the three pillars of the economy alongside public and private sectors.
However, owing to poor regulation there is a concern about the safety of the public deposits in the cooperatives. “Despite huge transactions, cooperatives are not proper regulated,” said a senior NRB official. “If problem arises in cooperatives, it could affect the financial system.”
He said that the central bank has been providing its expertise to the DoC in its late effort to regulate the cooperatives.
A study carried out by Finance Ministry three years ago on some of the big cooperatives had taken the lid off huge irregularities, including cases where a single family occupying almost all seats in the board of a cooperative, and other governance related problems.
Bishnu Prasad Ghimire, under secretary at the DoC, said that they are working to enhance monitoring mechanism of the sector. According to him, the Ministry of Cooperatives and Poverty Alleviation (Mocha) in coordination with DoC has recently formed a committee to prepare working guideline for monitoring the sector.
“Since last year, the department in association with NRB has also been cross-checking 60 cooperatives with an annual transaction worth over Rs 50 million,” he said. “Besides this, 38 division offices also carried out cross-checking of around 5,400 cooperatives across the country last year.”
Speaking at the programme, Cooperatives Minister Ek Nath Dhakal said that the government was planning to introduce an effective
mechanism to regulate the sector amid overwhelming number of
cooperatives. “However, there is a need for improving the coordination between government entities and the MoCPA,” he said.
Despite the growing number of cooperatives, the sector is being impeded by the lack of proper act along with the inadequate manpower with the DoC. The department current has a total of 594 officials on its payroll. “There is a need for enforcing the National Cooperatives Act along with developing the human resource in the sector,” said Neupane of DoC.
According to the DoC, the sector is accommodating 3.5 million people as their members while providing employment to 75,000 people. Its contribution in the national income is estimated to be 3 percent.
Source: The Kathmandu Post
Despite concerns about poor regulation, the cooperatives have proved to be important players in the country’s financial market with annual transactions worth around Rs 280 billion in the last fiscal year.
According to the Department of Cooperatives (DoC), cooperatives have held deposit of Rs 125 billion, lending of Rs 133 billion and share capital of Rs 22 billion. There are a total of 25,353 cooperatives across the country as of Mid April 2012. As of first 11 months of the last fiscal year, the cooperatives collected 12.84 percent of the total deposits Rs 973 billion in the banking system.
Speaking at an annual review meeting, DoC Registrar Kedar Neupane said that cooperatives’ role in helping people, mainly in the rural areas, to uplift their living standards has attracted a growing number of people towards them.
Considering their role in poverty alleviation, the government has also established a separate ministry to look after the cooperatives. They have been recognised as one of the three pillars of the economy alongside public and private sectors.
However, owing to poor regulation there is a concern about the safety of the public deposits in the cooperatives. “Despite huge transactions, cooperatives are not proper regulated,” said a senior NRB official. “If problem arises in cooperatives, it could affect the financial system.”
He said that the central bank has been providing its expertise to the DoC in its late effort to regulate the cooperatives.
A study carried out by Finance Ministry three years ago on some of the big cooperatives had taken the lid off huge irregularities, including cases where a single family occupying almost all seats in the board of a cooperative, and other governance related problems.
Bishnu Prasad Ghimire, under secretary at the DoC, said that they are working to enhance monitoring mechanism of the sector. According to him, the Ministry of Cooperatives and Poverty Alleviation (Mocha) in coordination with DoC has recently formed a committee to prepare working guideline for monitoring the sector.
“Since last year, the department in association with NRB has also been cross-checking 60 cooperatives with an annual transaction worth over Rs 50 million,” he said. “Besides this, 38 division offices also carried out cross-checking of around 5,400 cooperatives across the country last year.”
Speaking at the programme, Cooperatives Minister Ek Nath Dhakal said that the government was planning to introduce an effective
mechanism to regulate the sector amid overwhelming number of
cooperatives. “However, there is a need for improving the coordination between government entities and the MoCPA,” he said.
Despite the growing number of cooperatives, the sector is being impeded by the lack of proper act along with the inadequate manpower with the DoC. The department current has a total of 594 officials on its payroll. “There is a need for enforcing the National Cooperatives Act along with developing the human resource in the sector,” said Neupane of DoC.
According to the DoC, the sector is accommodating 3.5 million people as their members while providing employment to 75,000 people. Its contribution in the national income is estimated to be 3 percent.
Source: The Kathmandu Post
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