Inactive Cooperatives May Face Deregistration in Nepal ➤

Inactive Cooperatives May Face Deregistration in Nepal

Government Authorities Crack Down on Non-Responsive Cooperative Societies, Issuing Notices and Cancellation Warnings to Improve Compliance and Transparency in Nepal's Cooperative Sector

In a bold move to ensure transparency and accountability within Nepal’s cooperative sector, authorities have initiated stringent measures targeting inactive and non-responsive cooperative societies. The Kathmandu Metropolitan City (KMC) and the Madhes Provincial Government have taken decisive actions, issuing warnings and cancellation notices to cooperatives that have failed to maintain regular communication and reporting.

The cooperative experts have recommended deregistering approximately 900 cooperatives that have not responded to the KMC’s calls for contact, despite specifying the metropolis as their designated working area. During a program titled “Research and Investigation for Cooperative Upliftment,” organized by the KMC’s Cooperatives Department, experts emphasized the need for strict enforcement measures.

According to Balaram Tripathi, the head of KMC’s Cooperatives Department, cooperatives with an annual turnover of up to Rs. 250 million fall under the jurisdiction of local authorities, those between Rs. 250 million and Rs. 500 million are regulated by provincial governments, and cooperatives with a turnover exceeding Rs. 500 million are governed by federal authorities, as per the Cooperatives Act.

The act allows for the merger, division, or closure of cooperatives based on the decisions of the general assembly and regulatory bodies. Tripathi revealed that the KMC is forming a committee to manage problematic cooperatives effectively.

Cooperatives expert Kashi Raj Dahal suggested canceling the registrations of cooperatives that fail to respond to the metropolis’s communication attempts. “If cooperatives do not respond to letters, a public notice should be issued calling for their operators to establish contact. If they still do not respond, the metropolis should proceed with registration cancellation,” Dahal stated.

The Cooperatives Department reported that only 968 out of 1,923 cooperatives within the metropolis’s jurisdiction had updated their information by the end of the previous fiscal year.

Meanwhile, the Madhes Provincial Government has also taken steps to locate and address non-responsive cooperative organizations. According to ministry statistics, 782 registered cooperatives in the Madhes Province have ceased communication and have failed to submit reports for the past six years.

The Ministry of Land Management, Agriculture, and Cooperatives issued a 35-day notice, urging these unresponsive cooperatives to re-establish contact or face punitive measures. Sunil Thapa, a Branch Officer at the ministry, explained that the search targeted cooperatives that neglected to renew their registration or provide regular updates.

Overall, Nepal has approximately 32,000 registered cooperatives, with 146 under federal government oversight, around 19% under provincial governments, and approximately 80% under the regulatory jurisdiction of local governments.

As Nepal’s cooperative sector continues to grow, authorities are prioritizing transparency, accountability, and adherence to reporting requirements to maintain public trust and foster a healthy cooperative ecosystem.