Kathmandu, Nov 24: The government of Nepal has banned the registration of new cooperatives of any nature, expansion of scope and approval of service centers.
The Ministry of Land Management, Cooperatives and Poverty Alleviation has decided to prohibit the registration of cooperatives of any nature from the federation, state and local levels, the extension of the scope of work and the approval of service centers by making metropolitan cities, sub-metropolitan cities and municipalities the main business of savings and loans, unless otherwise arranged.
Referring the decision of the Council of Ministers on Kartik 23, Ganesh Prasad Bhatta, the spokesperson of the Ministry, informed that as the risk of affecting the entire financial sector is increasing, such activities have been banned as per the decision of the Council of Ministers. According to the ministry, there has been an increase in the trend of accepting large savings and making risky investments from the cooperatives that deal with savings and credit in large numbers across the country.
According to the statement issued by the ministry on Thursday, as the savings of the members and savers of cooperatives cannot be returned, a big problem has been created in the cooperative organizations.
