"Only around 30 percent of SCCs operating in the valley submitted their financial statement. Almost all the big cooperatives, which were under government scanner last year, are among those defying our directives,” Keshab Bahadur Thapa, chief of the Kathmandu DCO, told Republica on Wednesday.[break]
Only about 800 of the total of 2,200 SCCs in the capital submitted their financial statement at the DCO by Feb 7 -- the last day of submission.
The Department of Cooperatives (DoC) about a month ago had directed all SCCs to submit their financial status of any month within the first week of the following month. DCO too had instructed all SCCs having transactions more than Rs 50 million to submit the reports to DoC and Nepal Rastra Bank- the central bank.
About 100 SCCs operating in the capital have transactions of more than Rs 50 million.
"We have arrived at the conclusion that SCCs deliberately ignored our call by failing to comply with the new mandatory provision,” Thapa said.
Among the big SCCs, only Himalayan Saving and Credit Cooperatives submitted its financial statement within the stipulated timeframe.
Thapa also opined that lengthy process of filling forms for financial statement and lack of sufficient information about the introduction of new rules might be the other reasons.
A source at the DoC told Republica that some of the big cooperatives are not submitting the report to the NRB, arguing that the central monetary authority was not the right agency to regulate them.
Amid growing financial threat posed by the burgeoning number of SCCs violating the Cooperatives Act, the government had come up with the mandatory provision in a bid to bring them back on track. The DoC had directed all SCCs in Kathmandu to submit monthly financial reports after the high-level Financial Sector Coordination Committee led by the then Finance Minister Surendra Pandey endorsed the new provision recently.
As per existing provisions, cooperatives must submit an audited financial report by mid-September -- two months after the end of the fiscal year, and the report endorsed by the annual general meetings within five months of completion of the fiscal year.
The DoC had directed SCCs to submit particulars, including status of their share capital, reserves, deposits, assets, cash balance, non-performing loans, loan loss provisions, total investment, profit and loss, loan recovery, interest on loans and deposits, number of members and number of employees, among others.
"In the first phase, we will impose a fine of Rs 1,500 for the SCCs failing to submit financial reports on time. We will adopt tougher measures if they continued to defy our directives," Sudarshan Dhakal, registrar of DoC, said.
DoC seeks clarification from 140 co-ops
DoC on Tuesday sought clarification from 140 cooperatives not abiding by the Cooperatives Act. It has warned the management of those cooperatives of canceling registration if they failed to furnish reasonable clarification within 35 days.
According to DoC sources, those cooperatives were found not submitting reports to concerned cooperative offices for more than two years and were also not holding annual general meetings regularly. They were also found non-operational at the time of on-site inspection.
The DoC had revoked registration of 200 cooperatives in 1997, 50 in 2000 and 43 in 2007 as per the Cooperatives Act 1992.
"If these cooperatives failed to furnish clarification within 35 days, we will have no option but to cancel their registration," Dhakal added.
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