The Nepal government on Monday formally established the National Cooperative Regulatory Authority (NCRA) to tackle longstanding issues in the cooperative sector and safeguard depositors’ interests.
This development follows a Cabinet decision on December 25 to dissolve the National Cooperative Development Board (NCDB) and replace it with the NCRA via an ordinance. The ordinance, authenticated by President Ramchandra Paudel on December 29, grants the NCRA greater regulatory powers.
Inauguration of the Authority
Minister for Land Management, Cooperatives, and Poverty Alleviation, Balaram Adhikari, inaugurated the NCRA’s office in Lalitpur. During the ceremony, Minister Adhikari expressed optimism about the Authority’s ability to hold cooperative operators accountable for embezzlement of savings of depositors.
“The NCRA would ensure that local, provincial, and federal governments share responsibility for addressing cooperative-related challenges,” he said. He also emphasized the urgent need to update outdated cooperative laws to prevent future issues.
Leadership and Governance
The government appointed Arjun Prasad Pokharel, Secretary of the Ministry of Land Management, Cooperatives, and Poverty Alleviation, as the NCRA’s interim chairman. An official explained that Pokharel’s familiarity with the ministry makes him well-suited for the role during the initial phase.
The authority will have four members including the chairperson. Other members include an executive director from Nepal Rastra Bank, a joint secretary from the cooperative ministry who will be the ex-officio member and a chartered accountant as expert member.
On Monday, Minister Adhikari administered the oath of office to Chairman Pokharel and members Guru Prasad Poudel who is executive director at Nepal Rastra Bank) and Madan Koirala who is Joint Secretary of the ministry. The appointment of the expert member is expected soon.
The newly formed board held its first meeting on the same day, where it was decided to establish a task force to develop regulatory standards for cooperatives.
Transition from NCDB to NCRA
Under the ordinance, employees of the dissolved NCDB have been transferred to the NCRA. Unlike the NCDB, which focused on promoting cooperatives, the NCRA is tasked with monitoring, regulating, and investigating cooperative activities and initiate actions against culprits. Officials have described the NCRA as a more powerful and autonomous entity, capable of addressing systemic issues in the cooperative sector through supervision and regulation.
Challenges and Controversies
While the NCRA has been welcomed as a necessary step to reform the cooperative sector, some cooperative operators have criticized aspects of the ordinance. Khemraj Subedi, Director of the Nepal Savings and Credit Central Cooperative Association, voiced concerns over provisions limiting the amount cooperatives can accept in deposits. He argued that cooperatives should be classified based on their business scale and service delivery, rather than geographical location.
However, Ganesh Prasad Bhatta, spokesperson for the cooperative ministry, defended the measure, stating, “Banks now operate even in remote areas, so setting limits on deposits ensures the safety of savings.”
Context and Significance
The establishment of the NCRA follows recommendations from a parliamentary probe panel, which in September urged the government to create a robust regulatory body to address the cooperative sector’s crises. Over 34,000 cooperatives operate across the country, with a membership of approximately 3 million people.
The NCRA is expected to be a key instrument in resolving systemic challenges, protecting depositors’ savings, and restoring trust in the cooperative sector.
