A large number of cooperatives operating in Kathmandu district have been found not abiding by the standards fixed by the regulator. Major problems seen in these cooperatives include accepting excess deposits and providing large loans to a single member, among others.
The Division Cooperative Office (DCO), Kathmandu, had cross-checked 250 cooperatives with annual transaction of up to Rs 50 million in the first three months of fiscal year. DCO chief Balaram Niraula said most of the cooperatives have been found failing to maintain the financial ratio as fixed. “Although the cooperatives are permitted to collect deposits up to 10 times of their share capital, most of them have collected deposit in excess,” he said.
Also, the cooperatives cannot lend more than 10 percent of the loan to a single executive. “But many of them are not following the norms,” he said. Investment in unproductive sectors and high liquidity are among the problems seen in the cooperatives . “Of late, they have reduced investment in the realty sector. But many of them are struggling to recover their realty loan,” said Niraula.
Of the 3,646 cooperatives operating in the Capital, 3,300 are savings and credit, and multipurpose cooperatives .
The DCO inspects cooperatives with transaction up to Rs 50 million through its two monitoring teams, while the ones with transaction of more than Rs 50 million are inspected in coordination with the Department of Cooperatives.
Although the cooperatives with annual turnover of Rs 10 million are required to report to the DCO, many have failed to do so. Also, a number of them have not received the auditor’s approval.
Niraula said they would soon start probe into cooperatives that failed to conduct annual general meetings and receive the auditor’s approval for the last two years. “We will forward the process of scrapping the licenses of these cooperatives .”
The DCO liquidated 126 such cooperatives last year.
source: the kathmandu post,23 Nov 2013
LINK
The Division Cooperative Office (DCO), Kathmandu, had cross-checked 250 cooperatives with annual transaction of up to Rs 50 million in the first three months of fiscal year. DCO chief Balaram Niraula said most of the cooperatives have been found failing to maintain the financial ratio as fixed. “Although the cooperatives are permitted to collect deposits up to 10 times of their share capital, most of them have collected deposit in excess,” he said.
Also, the cooperatives cannot lend more than 10 percent of the loan to a single executive. “But many of them are not following the norms,” he said. Investment in unproductive sectors and high liquidity are among the problems seen in the cooperatives . “Of late, they have reduced investment in the realty sector. But many of them are struggling to recover their realty loan,” said Niraula.
Of the 3,646 cooperatives operating in the Capital, 3,300 are savings and credit, and multipurpose cooperatives .
The DCO inspects cooperatives with transaction up to Rs 50 million through its two monitoring teams, while the ones with transaction of more than Rs 50 million are inspected in coordination with the Department of Cooperatives.
Although the cooperatives with annual turnover of Rs 10 million are required to report to the DCO, many have failed to do so. Also, a number of them have not received the auditor’s approval.
Niraula said they would soon start probe into cooperatives that failed to conduct annual general meetings and receive the auditor’s approval for the last two years. “We will forward the process of scrapping the licenses of these cooperatives .”
The DCO liquidated 126 such cooperatives last year.
source: the kathmandu post,23 Nov 2013
LINK
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