According to Division Cooperative Office (DCO) Kathmandu, only around 1,000 of more than 2,500 SCCs in the Valley submitted monthly statement (mid-January to mid February) by Sunday - the last day for submission.[break]
"Majority of the SCCs, including big cooperatives, defied our instructions for the second time by challenging the government´s effort to regulate them," Keshab Bahadur Thapa, chief of Kathmandu DCO, told Republica.
A probe last year had found host of irregularities and malpractices in big SCCs operating in the Kathmandu Valley and Pokhara, prompting the government to take different measures to regulate their operations.
Challenging the mandatory provision of submitting financial statement, only one-third of the SCCs in the capital had submitted their financial statements for mid-December to mid-January.
The Department of Cooperatives (DoC) -- the regulatory body -- had directed all the SCCs in the capital to submit their financial statement of a month within the first week of the succeeding month to DCO Kathmandu. It had also instructed all SCCs recording transactions of more than Rs 50 million to submit their reports to DoC and Nepal Rastra Bank -- the central monetary authority.
About 100 SCCs operating in the capital have transactions of more than Rs 50 million.
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 the SCCs in the capital to submit their monthly financial reports after the high-level Financial Sector Coordination Committee led by the then Finance Minister Surendra Pandey endorsed the new provision.
As per the 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.
Issuing the new directives, the DoC had also 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.
As per the Cooperatives Act, DoC can impose a fine of only Rs 1,500 for the SCCs failing to submit financial reports on time.
Sudarshan Dhakal, registrar at DoC, told Republica that the department would slap a fine as prescribed in the act and make public the name of those defying the instruction.
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