Nepali Congress Pledges 'Zero Tolerance' Policy Against Cooperative Fraud, Enhanced Regulation

Kathmandu. The Nepali Congress has pledged a policy of 'zero tolerance' against fraud and ensuring depositor security through the National Cooperative Regulation Authority, among various promises.

To address the challenges seen in the cooperative sector for the House of Representatives election scheduled for this coming Falgun 21, the Congress has put forward the effective implementation of a deposit protection fund and a zero-tolerance policy against fraud.

The Congress is committed to making cooperatives risk-free, digital, production-oriented, and a reliable pillar of the economy through strong regulation and institutional good governance, addressing the current challenges in the cooperative sector.

According to the manifesto released by the Congress for the election, cooperatives involved in lending and savings with transactions exceeding NPR 250 million will be regulated by the Nepal Rastra Bank. Furthermore, the Congress manifesto mentions implementing a supervision system with technical manpower and digital technology to remove duplication between the federal, provincial, and local levels and make regulation effective.

The party has stated it will ensure transparent accounting, regular auditing, 'digital tracking', early risk signaling systems, and provisions for action against fraud to secure depositors' funds.

The manifesto states, "We will facilitate the return of savings for depositors of troubled cooperatives; for small depositors up to NPR 500,000, we will issue internal bonds guaranteed by the government and return the funds through the Authority. For the savings of large depositors, we will facilitate their return by disclosing the source according to the law and bringing it under the tax net. We will ensure legal certainty to confiscate the assets of those who defraud cooperative funds and return the savings to depositors."

The Congress has promised to establish a system where separate working groups are formed based on the latest transactions for troubled savings and credit cooperative institutions, giving them the authority to recommend the settlement of assets and liabilities, as well as reorganization or dissolution.

The manifesto states, "We will enact legal provisions to freeze the bank accounts of debtors who intentionally default on loans and restrict them from government services and running for election candidacy. We will bring the tendency of running cooperatives like private businesses, capturing them by vested interest groups, and making decisions against member interests under the legal framework and take action."

The Congress has announced that the federal government will create regulations and standards for cooperative institutions based on the provisions in the constitution's schedules, and clarify provisions to make the registration, record-keeping, and good governance systems of cooperative institutions effective at the provincial and local levels. Furthermore, the Congress's election promise includes making insurance mandatory for funds up to a certain limit for savings and credit cooperative institutions.

The Congress has pledged to implement an 'Integrated Digital System' that allows the regulatory body to monitor in real-time, making the complete 'digital' documentation of all cooperative transactions and information systems mandatory.

The party has made an election promise to strictly implement the concept of 'one person, one microfinance loan' to end the situation where the same person takes loans from multiple microfinance institutions and falls into a debt cycle.