Kathmandu Metropolitan City Cracks Down on Non-Compliant Cooperatives

Kathmandu. There are approximately 1,900 cooperatives operating within the Kathmandu Metropolitan City (KMC). Less than 50 percent of these cooperatives submit their reports regularly. The high number of cooperatives failing to submit reports regularly indicates potential issues within those institutions.

According to the KMC Cooperative Department, out of about 1,900 cooperatives operating within its jurisdiction, only 723 regularly submit their annual reports.

Dhruvakumar Kafle, head of the KMC Cooperative Department, stated that the metropolis has repeatedly urged cooperatives to submit their annual reports regularly. The KMC is preparing to initiate legal action against those that fail to submit reports for an extended period under various pretexts.

Kafle said, “Some cooperatives do not come into contact, while others do not report because they have faced disciplinary action. Cooperatives that issue loans against the law also have a practice of not submitting reports regularly. These cooperative institutions have already been directed to immediately conduct their annual general meetings and submit the audit reports, general meeting decisions, and annual reports to the KMC Cooperative Department.”

According to him, since liquidating cooperatives that have not submitted general meeting reports for a long time could lead to the misappropriation of depositors' funds, the metropolis has decided to prioritize the submission of reports before proceeding with the liquidation process.

Don't Lose Your Principal for the Greed of Interest!

The KMC has urged depositors to avoid losing their principal in the greed for high interest rates. According to Kafle of the KMC Cooperative Department, rather than regretting after depositing, one should verify whether the cooperative is operating according to regulations, whether its audit is conducted regularly, whether the interest rate is reasonable, how the institution's financial transparency is, and whether there is regulatory oversight before depositing money.

Chief Kafle said, “One should stay away from the mentality of depositing money without due diligence just because it is a friend's or relative's cooperative; otherwise, the savings could be lost.” Currently, many cooperatives are facing problems due to being operated by groups of associates, and issues arise because they do not follow the mandatory legal procedures while using the funds.