Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The government is preparing to compensate small depositors of crisis-hit cooperatives, marking the first concrete step toward addressing growing public outrage over unpaid savings.
According to the draft operating procedure for a Circular Fund prepared by the Ministry of Land Management, Cooperatives and Poverty Alleviation, the government plans to return up to Rs 100,000 to each affected small saver. Ministry spokesperson Ganesh Prasad Bhatt confirmed that the Cooperatives Ministry has formally requested Rs 2 billion from the Ministry of Finance to initiate the fund.
“The draft includes a proposal to reimburse savings of up to Rs 100,000,” Bhatt said. “Whether depositors with exactly one lakh will receive the full amount depends on the Finance Ministry’s final decision.”The draft has already been forwarded to the Finance Ministry for review, and officials say the final disbursement size will be confirmed only after inter-ministerial evaluation.
For months, thousands of cooperative victims have staged protests demanding the return of their savings. The government’s move follows mounting pressure from depositors as well as growing public criticism over the state’s inability to regulate fraudulent cooperatives.
The Financial Sector Reform Recommendation Commission had earlier advised the government to create a national fund and compensate up to Rs 500,000 for affected savers. The commission also recommended that assets seized from cooperative fraud operators be sold, with proceeds deposited into the same fund to ensure long-term sustainability.
By moving forward with the circular fund, the government is now preparing to implement those recommendations—at least partially—starting with compensation for the smallest and most vulnerable depositors.
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