Cooperatives rob poor of over Rs 250m
KATHMANDU: Cooperatives’ rackets in Kathmandu metropolis devoured over Rs 250 million — mostly the savings of poor people — in the last decade. Division Cooperatives Office (DCO) Kathmandu has filed cases of fraud against 52 cooperatives in the district court till date.
Over 2,000 cooperatives are registered in Kathmandu district and 70 per cent of them are within the metropolis. Managing cooperatives is a big challenge for DCO due to poor infrastructure and scant human resources. “We are doing our best to reduce the risk to people’s savings,” said Krishna Prasad Sharma, a section officer. According to Sharma, a new enforcement policy and strengthened monitoring mechanism have reduced fraud cases since 2003. But not all the cooperatives are following the directive of submission of monthly and annual reports. “Only 50 per cent of the cooperatives are submitting annual report regularly,” an officer at DCO said. He added that the monthly report submission rate is less than 10 per cent.
DCO has recorded one fraud case against New Global Cooperative in the last seven years. The year 2002 was a glorious one for fraudulent cooperatives, with 39 out of the 52 guilty cooperatives looting millions of rupees. The biggest looters are Future Cooperative in Thamel (Rs 20 million), Center Cooperative in Asan (Rs 82,98,872), Bhawani Multipurpose Cooperative in Thamel (Rs 10 million) and Siddharth Savings and Credit Cooperative in Chabahil (Rs 46,61,206). Promoters of these cooperatives are absconding.
Some 15,000 Nepali cooperatives have a total deposit of around Rs 69 billion and the deposits are in risk due to lack of strong mechanism to monitor their finance. “Yes, it is a crying need,” said Sharma. However, he stressed on building separate mechanisms for big and small cooperatives. “A dozen cooperatives need strong financial monitoring mechanism,” he explained.
In terms of transaction, Civil Savings and Credit, Oriental, Kantipur and Milan Multipurpose are the biggest in town. Their deposits are over a billion rupees each.
Last December, Nepal
Rastra Bank (NRB) showed interest in monitoring the big
cooperatives but it still seems a tall order.
Biggest cooperative frauds
Future Cooperative, Thamel Rs 20 million
Bhawani Cooperative, Thamel Rs 10 million
Center Cooperative, Asan Rs 82,98,872
Siddharth Cooperative, Chabahil Rs 46,61,206