Department of Cooperatives issues 10-point guideline
KATHMANDU, JULY 26
The Department of Cooperatives has issued a 10-point guideline for cooperatives and stated that the board of directors of the concerned cooperative can extend the loan tenure of any entity for a maximum of six months. The department has mentioned that the loan tenure can also be extended for a maximum period of one year upon approval from the regulator.
“As per the decision of the board of directors, loans can be extended for a maximum of six months after assessing the risks and requirement of the borrower,” the department said. Due to the impact of the COVID-19 pandemic on the economy the respective cooperative shall charge no interest, additional charges or penalties for extending the loan and interest payment period, it added.
Many countries have adopted expansionary monetary and financial policies to counter the effects of the coronavirus and Nepal Rastra Bank’s Monetary Policy has also tried to aid businesses and other professions by providing concessions, discounts and other facilities.
The Department of Cooperatives introduced the guideline after holding extensive discussions with experts of the sector on July 21. The meeting was also held to discuss on the preparations that needed to be made by the cooperative sector in the context of the Monetary Policy for fiscal year 2020-21.
As per the guideline, in order to make risk management efficient and effective during this critical time a risk management taskforce must be formed by cooperatives comprising of at least three members including a representative of the board of directors, a coordinator and a senior management personnel.
Likewise, cooperatives must submit reports and correspond electronically with the regulatory body when they need to do so. The guideline has also stated that cooperatives must adopt austerity in institutional expenditure and motivate members to do the same. It has also urged cooperatives to maintain good governance and follow instructions given by the department from time to time.
Moreover, to help revive the economic sector that has been affected by the coronavirus, cooperatives will give priority to members in the field of production, job creation and entrepreneurship development while disbursing concessional loans or providing refinancing facility.
The guideline has also urged cooperatives to inform and motivate their members and other members of the society to increase agricultural production and emphasise on kitchen gardens and rooftop farming.
Similarly, if the remaining interest amount to be recovered for fiscal year 2019-20 is received within the month of Shrawan then it shall be accounted as payment made in the previous fiscal year, as per the guideline.
A version of this article appears in e-paper on July 27, 2020, of The Himalayan Times.