Kathmandu. The government has initiated the process of amending the legal framework to solve the crisis in the cooperative sector and to secure the money of the savers. The Ministry of Finance has prepared a draft of the ‘Deposit and Credit Guarantee Fund (First Amendment) Act, 2083’ and proposed to expand the scope of the Deposit and Credit Security Fund to include cooperatives. <\/p>\n
The stakeholders can send their suggestions in writing to the draft of the bill through email fsmd@mof.gov.np of the Financial Sector Management and Corporation Coordination Division of the Ministry till October 3, 2081. <\/p>\n
}<\/p>\n
1) Deposit security of co-operative societies: The deposits of co-operative societies licensed by the National Cooperative Regulatory Authority to carry out the main business of savings and loans will also be secured through the fund. This provision, which was earlier limited to banks and financial institutions, will now be applicable to cooperatives as well. <\/p>\n
2) Advance payment in case of problem: In the earlier Act, there was a complex provision to refund the depositor’s amount only after the institution goes into liquidation or liquidation. According to the new proposal, in case the co-operative or bank is declared problematic and the responsibility of management is taken, the fund can make an advance payment to the saver equal to the secured deposit before the institution goes for liquidation. <\/p>\n
3. Establishment of separate Securities Fund: A separate fund shall be set up for the banking sector and for the cooperative sector (Co-operative Deposit Security Fund and Cooperative Credit Guarantee Fund) under the Fund. <\/p>\n
4. Security fee based on risk: The security fee may be determined at different rates by assessing the risk level of cooperatives and financial institutions. <\/p>\n
5. Operation and capital increase: The capital of the fund has been proposed to be increased to Rs. 10 billion. In addition, there will be coordination work between the Fund and the National Cooperative Regulatory Authority in information exchange and regulation. <\/p>\n
If the new provision is passed by Parliament and implemented into law, the deposits of the common citizens who have saved in the cooperatives will be safe. Even if the institution is troubled, small savers will be directly benefited as they will be paid in advance without waiting for a long time. <\/p>\n
The Finance Ministry believes that the new legal provisions will help in capital formation and financial access by restoring the general public’s lost faith in cooperatives and banking system. <\/p>\n
How much is it ensured to control malpractices, good governance and safety of savings in the cooperative sector? The new proposal will provide high priority and guarantee to the security of savings as it will pave the way for upfront payments to the savers of the problematic cooperatives. Also, the system of exchange of information, information about regulatory actions and potential financial risks between the National Cooperative Regulatory Authority and the Deposit Protection Fund will help in controlling the malpractices of the cooperative sector and promoting good governance. <\/p>\n
According to the report of the ‘Parliamentary Special Committee on Misuse of Cooperative Savings Money’ formed after the widespread irregularities and fraud in the cooperative sector in Nepal, and the records of the government bodies, about Rs. 65 billion to 87 billion of savings of the general public have been at risk or have sunk.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. The government has initiated the process of amending the legal framework to solve the crisis in the cooperative sector and to secure the money of the savers. The Ministry of Finance has prepared a draft of the ‘Deposit and Credit Guarantee Fund (First Amendment) Act, 2083’ and proposed to expand the scope of the […]<\/p>\n","protected":false},"author":5,"featured_media":228719,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45117,45159],"tags":[],"class_list":["post-317432","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bank-finance-en","category-news-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/317432","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=317432"}],"version-history":[{"count":1,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/317432\/revisions"}],"predecessor-version":[{"id":317433,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/317432\/revisions\/317433"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/228719"}],"wp:attachment":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=317432"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=317432"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=317432"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}