With Nepal’s savings and credit co-ops sector still reeling from its corruption scandal, the government has introduced fines ranging from Rs 500,000 to Rs 1.5m on organisations that break state regulations.
A new body, the National Cooperative Regulatory Authority (NCRA), has been formed, with fresh legislation under way to streamline the operations in the sector, Republica has reported.
This is a response to an embezzlement scandal involving at least 22 co-ops, and has seen hundreds of arrests alongside street protests by victims.
As the government continues to act on the crisis, the NCRA’s executive director Shesh Narayan Poudel told a press call his team are preparing regulations, supervision procedures, and the necessary technology, the report added.The regulator will conduct on-site inspections of co-ops that were involved the scandal, with others monitored off-site.
Registration with the new regulator is mandatory for all savings and credit co-operatives to register with the NCRA.
Meanwhile, all co-ops have been ordered to submit detailed reports under anti-money laundering laws.
Last month, the Office of the Problematic Cooperatives Management Committee reported that it had returned or settled a total of Rs 3.71bn for victims of the scandal.
More than 61,000 depositors have filed complaints stating that their savings – amounting to Rs 38.42bn – were embezzled, misused, or misappropriated. Of this, Rs 34.71bn still remained to be refunded as of July.
In May, the government said it would confiscate the passports of individuals involved in misappropriating the co-op funds.
