Koshi Province Begins Repayment to Victims of Ambe-Koshi Cooperative Fraud

Biratnagar. The Koshi Province government has begun returning funds to depositors of the Itahari-based Ambe-Koshi Savings and Credit Cooperative Limited, which was declared problematic. Among the seven provinces in the country, Koshi Province has taken the lead in managing problematic cooperatives and returning funds to depositors.

The Problematic Cooperative Management Committee, formed under the Ministry of Industry, Agriculture, and Cooperatives, has started distributing funds by prioritizing small depositors in the first phase. The institution has 9,492 depositors with a total savings of 426,098,969 rupees, while 642 borrowers hold over 419.3 million rupees in loans.

It has been found that the former chairman of the institution, Phanindra Bahadur Puruchhane, alone took a loan of approximately 200 million rupees; he is currently in prison.

The committee has so far frozen 42 land plots belonging to the institution's directors, former directors, and individuals involved in the embezzlement. With the facilitation of the prison administration, the process of recording statements from the former chairman in jail and searching for assets is ongoing.

To date, 1,173 depositors have filed claims worth 248,810,872 rupees. The current distribution has started using approximately 1.38 million rupees collected from bank deposits and loan recoveries.

According to Jeevan Kafle, a member of the Problematic Cooperative Management Committee, the distribution is divided into three phases. 'We have prioritized small depositors who saved small amounts monthly in piggy banks,' said committee member Kafle. 'In the first phase, we are returning cash to 287 people who had savings of up to 20,000 rupees. Additionally, 21 people have already received their funds through savings adjustments. Thus, 308 small depositors are benefiting in this phase.'

In the second phase, the committee plans to provide relief to those with savings of up to 100,000 rupees. 'In the second phase, by distributing approximately 20,000 rupees each to depositors with up to 100,000 rupees, we can cover more than 600 people,' Kafle explained.

For the third phase of distribution, the committee is waiting for the 20 million rupee revolving fund allocated by the provincial government in the budget. 'The provincial government has allocated 20 million rupees as a revolving fund, which is currently in the processing stage. As soon as that fund is received, we will proceed with providing relief to all 1,173 claimants, including those remaining, in the third phase,' said Kafle.

Koshi Province Minister for Industry, Agriculture, and Cooperatives, Israel Mansuri, has shown special interest and provided directives from the very beginning to ensure the return of depositors' money as quickly as possible. Speaking about the minister's role, Kafle said, 'I want to thank the honorable minister. From day one, he urged us to return whatever amount is recovered to the depositors. This gave us additional pressure and energy.'

The committee has also started the practice of 'settlement' by clearing legal hurdles to accelerate loan recovery. This arrangement was made to end the situation where borrowers, despite wanting to pay, could not do so because their assets were frozen for years due to litigation.

'Some borrowers' families are in distress; they want to pay back the loan but cannot because of court cases. In such situations, we have opened the path for settlement with the help of legal professionals,' Kafle clarified. 'So far, we have completed 5 settlements. 9 mortgages have also been released after loan repayment. Since this path opened, borrowers have started coming with money.'

The committee has adopted a strict policy that the directors who caused the cooperative to collapse must be held accountable under any circumstances. The assets of all directors, whether they took loans or not, have been frozen. 'The question was raised as to why the directors' land should be frozen. But whether they took a loan or not, the final responsibility for settling the institution's accounts lies with the board of directors,' said Kafle. 'Therefore, they will not get immunity until the accounts are settled. We have frozen the land of all the directors.'

Committee member Kafle also clarified the confusion regarding jurisdiction in the regulation and management of cooperatives. According to him, the entire management responsibility of a cooperative whose working area is within a single municipality lies with that local government. 'The responsibility for making laws and managing cooperatives within a municipality lies with the municipality itself. They also have the authority to declare them problematic,' said Kafle. 'The initiative shown by Dharan and Itahari sub-metropolitan cities in managing cooperatives like Baraha and Machhapuchhre within their jurisdiction is commendable. In the case of cooperatives falling under the jurisdiction of the provincial government (those with working areas in more than one municipality), our committee starts work only after the provincial ministry declares them problematic.'

In the case of the Ambe-Koshi cooperative, the provincial government formed a committee on 2081 Bhadra 18 and declared the institution 'problematic' on Poush 23, immediately after which the committee took control of all documents and assets and started action.

The ministry claims that while 31 cooperatives have been declared problematic across the country, this is the first exemplary start of management in Koshi Province. By returning the hard-earned money of small workers and common people before that of large and influential depositors, the provincial government is trying to win public trust.