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Corruption: Nepal PM talks of tightening coop control

KATHMANDU, January 10, 2024 - The Prime Minister of Nepal, Pushpa Kamal Dahal directed the Ministry of Finance to propose a tangible solution for addressing the grievances of cooperative victims.

Over the past decade, numerous cooperatives in the country, including Oriental and Guna, swindled billions from depositors, reports Nepal’s media outlets.

Despite government committees and reports, little progress has been made in resolving these cases. Dahal expressed concern for the depositors left stranded by poorly-governed cooperatives and urged concrete plans.

Finance Minister Prakash Sharan Mahat suggested creating laws for Nepal Rastra Bank to regulate cooperatives involved in significant financial transactions. The government’s efforts so far have only provided relief to a few victims.

Meanwhile, the Reserve Bank of India [RBI] has imposed monetary penalties on five cooperative banks and extended the period of directions on Ramgarhia Cooperative Bank for three months till April 8, 2024.

The banks penalised include, Navsarjan Industrial Co-operative Bank, Mehsana Jilla Panchayat Karmachari Co-operative Bank, Halol Urban Co-operative Bank, Stambhadri Co-operative Urban Bank, and Subramanianagar Co-operative Urban Bank.

The RBI imposed a monetary penalty on Navsarjan Industrial Co-operative Bank Ltd., Ankleshwar, dist. Bharuch, Gujarat [the bank] for non-compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary [Urban] Co-operative Banks [UCBs]’, ‘Reserve Bank of India (Know Your Customer [KYC] Directions, 2016’ and contravention of ‘Section 26A [2] read with Section 56 of the Banking Regulation Act, 1949 [BR Act)’.

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