Government Announces Comprehensive Reforms for Financial Cooperatives

In a bid to ensure the integrity and stability of financial cooperatives, the government has unveiled a series of measures aimed at enhancing regulation and safeguarding the interests of members. The announcement comes in light of recent scandals that have rocked the sector, raising concerns about the misuse of funds and mismanagement.

Under the proposed reforms, the government will introduce provisions to enforce the original purpose of financial cooperatives and update the cooperative policy to reflect contemporary challenges. A specialized regulatory body will be established to intensively supervise and regulate the operations of cooperatives, ensuring compliance with standards and best practices.

To address the risks associated with financial cooperatives, the government will establish the Cooperative Savings and Credit Security Fund, Cooperative Credit Information Centre, and Cooperative Debt Recovery Tribunal. These institutions will work in tandem to protect the savings and investments of cooperative members, providing a safety net against potential financial pitfalls.

President Ramchandra Paudel, in presenting the government’s policy and program for the upcoming fiscal year, emphasized the importance of compulsory affiliation with the Cooperative and Poverty Management Information System. This initiative aims to streamline data management and facilitate better oversight of cooperative activities.

Moreover, the government will encourage consolidation within the sector by incentivizing savings and credit cooperatives to merge with one another. By fostering greater collaboration and synergy, this move seeks to enhance efficiency and resilience in the cooperative landscape.