The government has intensified efforts to recover defaulted loans from troubled cooperatives in a bid to return funds to affected depositors.
In a public notice issued, the Problematic Cooperative Management Committee (PCMC) directed directors, debtor members, managers, employees, and guarantors of such cooperatives to repay outstanding loans within 15 days. In the first phase, the deadline applies to 20 cooperatives identified as problematic.
The cooperatives listed include Standard Savings and Credit Cooperative, Pacific Savings and Investment Cooperative, Prabhu Savings and Credit Cooperative, Societal Savings and Credit Cooperative, Lunibha Multipurpose Cooperative, Consumer Savings and Credit Cooperative, Oriental Cooperative Limited, Kohinoor Hill Savings and Credit Cooperative, Vegas Savings and Credit Cooperative, and Pashupati Savings and Credit Cooperative.
Others named are Tulsi Multiple Cooperative Society, Shivshikhar Multipurpose Cooperative Society, Hamro Naya Krishi Cooperative Society, Krishi Bikas Multipurpose Cooperative Society, Kantipur Saving and Credit Cooperative Society, Shree Laliguras Multipurpose Cooperative Society, Gautam Shree Multipurpose Cooperative Society, Gorkha Saving and Credit Cooperative Society, Nepal Cooperative Financial Institution, and Shree Ideal Yamuna Hamro Multipurpose Cooperative Society.
The Ministry of Land Management, Cooperatives and Poverty Alleviation has already declared these entities problematic and placed them under the PCMC’s jurisdiction for asset management and liability settlement.
According to the committee, repeated notices were issued through its website, national newspapers, and phone calls, but defaulters failed to respond. The PCMC has now warned of strict legal action if dues are not cleared within the given timeframe. It stated that names of defaulters will be made public, while their assets and bank accounts—as well as those of their families and guarantors—could be frozen. Defaulters may also be barred from accessing public services.
The committee added that outstanding loans would be recovered through auctions, sales, or other measures in line with the Cooperative Act 2017 and Cooperative Regulations 2018.
Meanwhile, the Ministry has begun preparing a framework to return deposits to affected individuals. Minister Prativa Rawal has held discussions with chartered accountants to strengthen financial discipline in the cooperative sector.
Following the formation of the government led by Balen Shah, authorities pledged to begin refunding deposits to small savers within 100 days under a broader reform agenda. The initiative aims to address a long-standing financial crisis that has impacted thousands of ordinary citizens.
However, critics argue that the move falls short of resolving deeper structural issues in the cooperative sector, particularly as borrowers accused of misusing funds have yet to face full accountability.
Ravi Lamichhane, chair of the Rastriya Swatantra Party, which leads the government, is among those facing allegations related to cooperative fund misuse and is currently undergoing legal proceedings.
Observers warn that failure to act against high-profile defaulters could undermine public trust and reinforce perceptions of unequal enforcement.
