The Department of Cooperatives (DoC) has cautioned the cooperatives not to increase the interest rates on their own.
At a time when banks have increased their interest rates on loans, the cooperatives have also been pressing the regulator to increase the reference interest rate to 20 percent from the existing 16 percent. Since last week, banks have raised interest rates on their deposits, which shows the high possibility that they will increase interest rates on loans any time soon.
Speaking at a program organized by the Cooperatives Journalists Society Nepal on Wednesday, the DoC’s Registrar Tolraj Upadhyaya said the department will take action against those cooperatives that will raise the interest rates rampantly. He said the DoC does not consider revising the reference interest rates at present.
Upadhyaya however said that the department has formed a panel to study the current situation of fluctuating interest rates and its subsequent impact on the cooperative sector. According to him, the cooperative regulation has also barred the cooperatives from increasing reference interest rates above 16 percent.