Disagreement on one and a half dozen points including maintaining 15 percent liquidity, institutions with more than 15 percent bad loans cannot go to the authority, and cooperatives cannot hold third party mortgages when disbursing loans.
The National Cooperative Federation has started lobbying to loosen the norms for the regulation of savings and credit transactions of cooperatives within a week. The federation has decided to lobby for amendments by expressing disagreement with about one and a half dozen points in the 'regulatory standards 2082 issued in relation to the business of cooperative organizations that deal mainly with savings and loans' issued by the National Cooperative Regulatory Authority last week.
Om Devi Malla, president of the National Cooperative Federation, informed that there is disagreement on one and a half dozen points, including liquidity calculation, 15 percent liquidity must be maintained, institutions with more than 15 percent bad loans cannot go to the authority, cooperatives cannot hold third party collateral when disbursing loans. She said that the meeting has decided to form a working group to discuss and communicate with the relevant agencies to amend the provisions that are contrary to the values, beliefs and principles of the cooperatives and cooperatives as seen in the standards.
The meeting held at the hall of the National Cooperative Federation on Monday concluded that some points of the standards issued last week for the regulation of the cooperative sector have hampered the savings and loan campaign, and lobbying for amendments was concluded. Due to practical problems, the federation has formed an 11-member high-level working group for the necessary amendments. The central working committee meeting presided over by the president of the federation decided to form a working group to discuss and communicate with the relevant agencies for the amendment of the provisions that are contrary to the values, recognition and principles of cooperatives and cooperatives as seen in the standards.
National Cooperative Federation's Senior Vice President Ramesh Pokharel is the coordinator of the working group, the federation's vice president DB Basnet, director Paritosh Poudel, Nefscon President Chandra Prasad Dhakal, Bagmati Province Cooperative Association President Ram Sharan Sharma Ghimire, Proscon President Uddhav Sapkota are among the co-ordinators. "Cooperative organizations have become difficult due to many points of standards to operate practically. The working group will conclude which of these arrangements have caused problems for now and request the relevant bodies for revisions,' said the president of the federation, Malla.
Spokesman of the National Cooperative Regulatory Authority Ravin Dhakal said that they issued the standard after discussing with the officials of the cooperative campaign including the federation. "The standards have been released after discussing with the officials of the cooperative campaign including the Federation," he said, "However, there has been disagreement on some points." Those issues are also being discussed with them.' Spokesman Dhakal also said that as the standards are in accordance with the provisions of the Cooperative Act, all the demands of the campaign cannot be met. "The process of selecting the chairman and two directors of the authority has started. Even after the full working committee comes, the criteria can be revised by discussing with the campaign again," Dhakal said. In the
criteria, it is mentioned that savings must be collected only from the members of the cooperative and the maximum savings collection should be up to 15 times of the primary capital. The limit of savings collection per member by the organization will be up to 10 percent of the primary capital fund. For the purposes of this standard, when calculating the primary capital, the organization must calculate the primary capital on the first day of the first month (July 1) and the first day of the seventh month (January 1) and determine the limit of savings.'
The rules state that when the organization provides loans on the security of its members' shares and takes loans from other organizations by keeping the borrower's property as collateral, the borrower cannot borrow more than the loan amount taken from the organization. Now, the provision that cooperatives should classify bad loans and make provision for bad loans is mentioned in the standard.
Loans disbursed by the organization should be classified on the basis of installment/interest payment period and bad loan losses should be arranged according to the classification. The authority has made it mandatory for the institution to maintain at least 15 percent liquid assets of the total savings obligation. The organization has to decide and implement the interest rate, interest calculation method, compensation method and administrative service fee to be given and borrowed from the savings collected from its members by the board of directors of the organization. "While disbursing the loan, no fee other than administrative service fee, interest and compensation interest can be charged," the standard says.
