The report has recommended an immediate ban on new registrations, as increasing irregularities are observed in cooperatives due to negligence by regulatory bodies and local levels.
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The government report has recommended not registering new cooperatives and blocking approval for additional branches. The report of the Cooperatives Inquiry Commission has recommended not registering new cooperatives, not giving approval for opening branches or service centers, and requiring cooperatives that have opened more than one branch to close their branches after clearing their accounts. The
report has suggested that after managing the current situation of cooperatives, a feasibility study (ability of the operator, business that can sustain expenses, sustainability, etc.) should be conducted and a system should be implemented to hand over the right to register to the local level on the recommendation of the authority.
‘Since cooperatives are businesses that operate in accordance with the spirit of self-reliance and mutual cooperation, their scope of work should have been limited to a maximum of one village or a few wards of a municipality or a metropolitan city at the time of establishment/registration,’ the report states, ‘It was not appropriate to expand the scope of work of the organization throughout Nepal at the time of registration or within a short period of registration, and to allow more and more deposits to be collected through service centers.’
Therefore, until there is a clear institutional system to regulate cooperatives, the report concludes that it is absolutely necessary for the governments at all three levels to do the following: not to register new cooperatives, not to give approval to open branches or service centers, and to close branches after clearing the accounts of cooperatives that have opened more than one branch.
As a result of the regulatory body’s officials and campaigners aiding in the misuse of cooperative principles and business, approval has been given to expand the scope of work/service centers throughout Nepal.
Even after the promulgation of the Cooperatives Act 2074, the Commission has also recommended that action be taken in accordance with the law by investigating the relevant officers and local level employees at the responsible level, as it has been found that the officials of the regulatory bodies and the local level have registered organizations with multi-purpose and diverse names, contrary to the spirit of the act.
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