KATHMANDU: The Rastriya Swatantra Party (RSP) has unveiled a policy proposing that cooperative operators and managers accused of misappropriating depositors’ savings be dealt with through dialogue rather than imprisonment.
The provision has been included in the party’s election manifesto targeting the House of Representatives election scheduled for March 5, addressing the issue at a time when party Chair Rabi Lamichhane is himself has been linked to alleged misappropriation of funds in five cooperatives.
In its manifesto, the RSP stated that its primary objective is not merely to jail cooperative operators but to ensure the return of depositors’ money.
“Our objective is not just to put operators behind bars, but to ensure that depositors get their money back. Therefore, in line with our policy of ‘not by locking up, but by listening,’ if the operators or management of any cooperative financial institution are ready to return the depositors’ funds and have reliable sources and plans, we will pave the legal way for settlement,” the manifesto reads.
Under such circumstances, the party has proposed allowing them to remain outside custody with a full guarantee and clear timeline for refund, enabling them to mobilize assets and recover loans to repay depositors.
The RSP has also pledged to introduce automated systems in cooperatives and microfinance institutions to end exorbitant interest rates and unfair service charges.
To prevent duplication in loan disbursement and the cycle of debt traps, the party plans to link both cooperatives and microfinance institutions to the Credit Information Center to ensure loans are issued based on actual repayment capacity.
The manifesto further commits to returning savings to small depositors within 100 days of forming the government.
“We will remove cooperatives and microfinance institutions from unproductive real estate sectors and focus them on productive, collateral-free group-guarantee and locally skill-based entrepreneurial lending. Within 100 days of forming the government, we will ensure that small depositors’ savings are returned to their accounts,” the manifesto states.
The party has also proposed establishing a unified Savings Protection Fund from the state’s side to safeguard depositors’ earnings.
Additionally, the RSP has pledged to replace what it calls weak and uncontrolled regulation in the cooperative and microfinance sectors by bringing the entire non-banking financial sector under the direct and strong supervision of the Nepal Rastra Bank.
It has proposed mandatory strict regulation by the central bank for cooperatives and microfinance institutions with transactions exceeding Rs 500 million, equivalent to ‘Class D’ financial institutions, while forming a powerful second-tier regulator to oversee smaller institutions.
However, the government has already moved ahead with the implementation of the National Cooperative Regulatory Authority and initiated steps to bring savings and credit cooperatives with transactions above Rs 500 million under the regulation of Nepal Rastra Bank.
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