State failed to regulate cooperatives, depositors lost billions: Minister Ingnam
He stressed that since the state is responsible for protecting citizens and their property, it must take full responsibility for safeguarding depositors’ savings.
KATHMANDU: Minister for Land Management, Cooperatives and Poverty Alleviation Prof. Dr. Kumar Ingnam has admitted that the government’s long-standing failure to strictly regulate cooperatives led to a massive crisis, causing depositors to lose billions of rupees.
Speaking at the anniversary program of the National Cooperative Authority, Minister Ingnam said weak state oversight allowed mismanagement and fraud within cooperatives, ultimately pushing many institutions toward collapse.
He stressed that since the state is responsible for protecting citizens and their property, it must take full responsibility for safeguarding depositors’ savings.
According to the minister, not only depositors but also borrowers have suffered due to the crisis. In many cases, borrowers claim they repaid their loans, but due to poor or missing records, they are still listed as defaulters.
Ingnam blamed certain cooperative operators for exploiting their access to state mechanisms to engage in misconduct, which has resulted in widespread disorder across the cooperative sector. “Because of such malpractice by a few, the entire cooperative movement has been discredited,” he said.
He noted that cooperative depositors are now on the streets demanding justice, making it imperative for the government to act decisively. Learning from past mistakes, the government has begun enforcing strict regulation over cooperatives, he added.
The minister said the state has started monitoring all cooperative transactions and has already initiated processes to recover and return funds lost by depositors.
He also pointed out that problems in the cooperative sector have existed since 2060 BS, but the failure of state authorities to address issues in time allowed the situation to spiral into a full-blown crisis.
While some troubled cooperatives have attempted to return depositors’ money, Ingnam said those efforts have been insufficient. He added that the government is working to bring back cooperative operators who fled with public funds and to recover the money through legal means.
Emphasizing that not all cooperatives are problematic, Minister Ingnam said the government is committed to taking legal action against anyone found guilty of wrongdoing, regardless of their position, to restore trust in the cooperative sector.
