Kathmandu, May 9: Former Finance Minister Dr Yubraj Khatiwada has pointed out the need for second-tier regulation of cooperatives.
Commenting on the working paper presented on the second day of the national seminar of the Account Supervisory Committee (ASC) on Wednesday, Dr Khatiwada said Nepal was at immediate need for second-tier regulation and supervision of the cooperative sector in the wake of emerging problems surrounding it.
The National Federation of Savings and Credit Cooperative Unions Limited (NEFSCUN) organised the seminar which began on Tuesday.
On the occasion, he blamed that none of the agencies had become responsible to resolve the problems facing cooperatives.
The former Finance Minister warned, “We will be pushed to a condition that warrants other’s interference if we fail to carry out activities and sort out problems on our own.”
Both accountability and autonomy are essential in cooperatives. Anarchy leads to crisis. Therefore second-layer regulation is most necessary to end anarchism, he reiterated.
He said there were unique challenges in cooperatives which need legal redress. He further argued new problems surfaced after the cooperatives began running as financial companies.
On the occasion, Erik O’ Hern, International Advocacy and Regulatory Counsel for World Council of Credit Unions, shared that account supervision of cooperatives should be strong for their sustainability, while capable workforce at ASC is equally significant.
The account supervision committee should play a responsible role, providing advice in a right way, she said, adding financial literacy, adherence to rules and regulations, and credibility of members were other necessities in cooperatives.
“Many countries have different practices. The Account Supervisory Committee is an independent body. The Committee has its own role and responsibility.
Though ASC and Board of Directors are complementary to each other, ASC should be stronger than Board of Directors”, she opined. Presenting the working paper, Hern briefed about international practices on supervision and regulation of cooperatives.
