Govt to guarantee up to Rs 500,000 in savings at cooperatives

KATHMANDU: The government has announced it will guarantee savings of up to Rs 500,000 for depositors in cooperative institutions, aiming to restore public confidence amid rising concerns about mismanagement and fraud in the cooperative sector.

Presenting the national budget for the fiscal year 2025/26 in the Federal Parliament, Finance Minister Bishnu Prasad Paudel said that deposit protection will be ensured through a dedicated Deposit and Protection Fund.

“Deposits of up to Rs 500,000 in cooperatives will be safeguarded under the Deposit and Protection Fund,” Paudel said.

The government also plans to restructure the cooperative sector by introducing classification, consolidation, and institutional reform measures. A National Cooperative Regulatory Authority will be strengthened to ensure effective oversight, Paudel added.

To compensate depositors affected by misappropriation of cooperative assets, a dedicated recovery fund will be established. “Assets of those who misuse cooperative funds will be auctioned, and the proceeds will be used to reimburse affected depositors,” the finance minister stated.

Additionally, the government will establish a Cooperative Loan Tribunal to fast-track disputes and enforce accountability.

“We will also freeze the assets of those involved in the embezzlement of cooperative funds,” Paudel said.