Funds for troubled cooperatives’ depositors sourced from loan recoveries, says government

Kathmandu – The government has stated that the funds returned to affected depositors of troubled cooperatives have been sourced from loan recoveries. The Ministry of Land Management, Cooperatives, and Poverty Alleviation, under which the Troubled Cooperative Management Committee operates, issued a statement addressing public grievances and misconceptions about the use of state funds for this purpose.

According to the Troubled Cooperative Management Committee, the process of returning savings to small depositors with claims of less than 10,000 from 20 declared troubled cooperatives is ongoing in phases. However, it noted that a revolving fund has not yet been established. The committee stated that the process of returning savings to depositors from funds obtained through loan recovery and asset management of the troubled cooperatives is being conducted continuously as per existing legal provisions.

The statement read, “A revolving fund has not yet been established or operationalized in the committee. Nevertheless, the process of returning savings to depositors from funds obtained through loan recovery and asset management of the troubled cooperatives is being continuously conducted as per existing legal provisions. This information is provided to all concerned through this statement.”

To implement the provision in point number 99 of the list of 100 tasks approved by the Cabinet meeting on 2082 Chaitra 13, the government has issued the ‘Procedure for Establishment and Operation of the Revolving Fund for the Return of Savings to Members of Troubled Cooperative Institutions, 2083’ under the Troubled Cooperative Management Committee.

The committee has prioritized loan recovery, and so far, the amounts recovered from borrowers of the concerned cooperatives have been returned to the depositors of those cooperatives.