Kathmandu: The Nepal Rastra Bank (NRB) has proposed a five-point suggestion to tackle the issues faced by problematic financial cooperatives. During a meeting of the parliamentary probe special committee, which was formed to investigate the misuse of depositors' savings in financial cooperatives, NRB Governor Maha Prasad Adhikari outlined the potential solutions.

Governor Adhikari suggested a phased approach for returning the depositors' savings. In the first phase, savings up to Rs 100,000 would be returned. In the second phase, savings up to Rs 500,000 would be addressed, followed by the third phase where savings exceeding Rs 500,000 would be returned. To resolve these issues, NRB has proposed forming a dedicated group to manage the problematic cooperatives, utilizing measures similar to those adopted for troubled banks.

Additionally, Governor Adhikari emphasized the necessity of regulatory measures for cooperatives operating without geographic restrictions. Anil Chandra Adhikari, Chief Executive Officer of the Credit Information Bureau, recommended establishing an integrated information system within the Bureau. He also suggested the creation of separate information bureaus specifically for insurance and cooperatives.

Sunil KC, President of the Nepal Bankers' Association, highlighted the urgency of addressing the problems in cooperatives to prevent similar issues in other financial institutions. Dr. Jay Kanta Raut, Coordinator of the erstwhile cooperative suggestion taskforce, noted that the sector's issues persist due to the lack of implementation of past recommendations. He mentioned that many cooperatives operate against established norms, values, and principles.

Experts at the meeting stressed the importance of establishing a Credit Recovery Tribunal for the financial cooperatives sector. Surya Bahadur Thapa, Chairperson of the Special Committee, stated that the committee had not yet decided whether the government should compensate the affected depositors. The ongoing discussions are focused on ensuring that the primary responsibility of returning depositors' savings remains with the cooperatives.

The meeting also revealed plans to invite officers who have previously served as registrars of the Cooperative Department since 2048 BS for further discussions. Future meetings will also include consultations with victims of financial cooperatives.