What is the regulation of cooperatives and the ordinance brought to return money of savers?

The Ordinance brought for the purpose of regulating the cooperatives and returning the sunk money of the savers has been published in the Gazette as soon as President Ramchandra Paudel has certified it. President Paudel issued the ordinance with approval last Sunday. With this, the way is now open for the government to implement the ordinance.

The government decided to amend some laws related to cooperatives through an ordinance last Tuesday. According to this, the Cabinet meeting decided to amend the Cooperative Act, 2074, the National Bank Act, 2058 and the Deposit and Credit Protection Fund Act, 2073.

Ordinance has special provision for refund of savings. Regardless of what is written elsewhere in the prevailing law, the ordinance stipulates that savings of up to five lakh rupees accumulated by members of cooperative organizations or cooperative organizations that have been declared problematic under Section 104 shall be paid on first priority.

In case of savings of more than five lakh rupees accumulated by the member, the concerned organization should make a standard and make arrangements to pay the member's saving amount proportionately if there is no situation to pay it at once. For the purpose of returning the savings, a provision has also been made in the ordinance that the cooperative organization or the management committee according to section 105 of the Cooperative Act can sell the mortgage security taken while providing the property or loan of such organization.

These are the main features of the new ordinance:

The registration of institutions dealing in savings loans will be done only at the local level. And its working area will be limited within the local level.
Currently established savings and loan trading cooperatives can be classified into associations, provinces and localities. And will be re-registered according to the classification in the authority or designated body.
A person cannot be a member of more than one cooperative at the same time and if he is, he must maintain membership in only one within a year.
The same person cannot stay in the executive position of the cooperative for more than two terms.
In a cooperative organization dealing in savings and loans, a person cannot save more than ten lakhs in local level cooperatives, up to twenty five lakhs in state level cooperatives and fifty lakhs in federal level cooperatives. If
has collected more than that, within two years it will be brought within that limit.
The source should be disclosed when collecting more than ten lakhs.
At present, expanding the jurisdiction of credit information centers of banks and financial institutions, they will act as credit information centers of cooperatives. And, it is mandatory to give notice of loan transactions of more than ten lakhs and blacklist notice regardless of the amount.
Every cooperative that deals in savings and loans must subscribe to the Deposit and Credit Protection Fund. Establishing a national cooperative regulatory body to act as a
regulatory authority. It will regulate the cooperatives that deal mainly with savings and loans. The executive chairman of this regulatory body, a cooperative expert and a chartered accountant will be appointed by the Government of Nepal. Director of Nepal Rastra Bank and joint secretary member of the Ministry.
A search committee will be formed for the appointment of the chairman and members and the Nepal government will appoint the chairman and members based on its recommendation.
The main task of the regulatory body (authority) is to create and implement national standards in matters such as registration, regulation, supervision, monitoring and reporting system of cooperatives that deal mainly with savings and loans, to issue regulatory standards (prudential standards) regarding the operation of cooperatives, To regulate, monitor and supervise, conduct, receive complaints, investigate complaints received and give instructions to related organizations, conduct prudential audits of cooperative organizations, To exercise the same powers as the District Court in handling and disposing of complaints.
If it is found that the laws and standards are not followed, a fine of five lakh rupees to fifteen lakh rupees will be imposed and the registration of such cooperative organization will be canceled, and the organization will be declared as a problematic organization and recommended to the ministry for necessary action.
The director or officer or manager or employee of the organization may be fined from one lakh rupees to five lakh rupees or sent to take other action in writing if the director or officer or manager or employee of the organization acts against the rules. The management committee can form a separate expert team for each organization to get the necessary services for the purpose of management.
Special provision regarding refund of savings amount

Regardless of what is written elsewhere in the prevailing law, the savings of up to five lakh rupees accumulated by members of a cooperative organization or a cooperative organization that has been declared problematic must be paid on first priority. The amount more than that will be returned by Damasahi.

For the purpose of returning the savings amount, the cooperative organization or the management committee can sell the mortgage security taken while providing the property or loan of such organization.
To give time to the debtor to repay the loan of the cooperative organization and if he does not pay, to auction the mortgage, to collect the rent of the mortgaged but leased property, for the purpose of returning the savings, he can request for the release of the withholding through the court or other agencies.
Even if the cooperative fraud and embezzlement case in court is under consideration or has been decided, there will be a settlement.
The present time limit of ninety days for prosecuting a case under the Cooperative Act will be one year.
A committee can be formed to return the savings money

If a cooperative organization has not returned the savings money to its members, the board of directors has acted against the interests of the members, or the majority of the board of directors is not present in the company or the general meeting has not been held in accordance with this Act, the member's savings money is returned. If it is not possible, at least fifteen percent of the members of the organization will take over the assets of the organization and return the member's savings for the purpose of Can submit an application for permission to form a committee to return the savings amount and operate the organization to the related cooperative monitoring body.

The general meeting should be held within 6 months of the formation of such committee and the savings amount should be returned gradually. For the purpose of returning the savings amount, the details of the amount recovered from the borrower, the amount of income received from the movable and immovable assets of the organization and the amount of savings returned to the saver should be prepared separately and kept in a safe record and the details should be submitted to the relevant cooperative monitoring body every three months. It is guaranteed that the member of the
committee shall not be held accountable for any actions contrary to this Act before taking responsibility in accordance with this section and that no legal action shall be taken against him in that regard.