Cooperative Institutions Refuse to Comply with National Cooperative Authority

Out of 32,000 savings and credit cooperative institutions called to register by the National Cooperative Authority, only 2,262 have done so. The reluctance of cooperatives to accept the regulatory authority and register has created challenges for regulation in the cooperative sector. The authority has communicated with the ministry to suspend operations of unregistered cooperatives and amend the Cooperative Act to facilitate enforcement. Kathmandu, March 12.

Savings and credit cooperatives and their federations have been hesitant to recognize the National Cooperative Authority as their regulator. Established last year as the regulatory body, the authority urged savings and credit cooperatives and unions to register. However, among 32,000 cooperatives across the country, only 2,262 have registered within the designated deadline. Concerned stakeholders fear that registration will disclose irregular and non-transparent activities or entail regulatory hassles, leading to their reluctance.

To address issues in the cooperative sector, parliament amended the Cooperative Act of 2017 to establish the National Cooperative Authority. The government has formed the authority accordingly. According to Section 20 (ka) of the Cooperative Act, savings and credit institutions must register with the authority or a designated body within one year from the effective date of this provision. This section came into effect on April 1, 2026, and cooperatives were required to register by March 31. While the authority has called these institutions to register as per the act, the number of cooperatives under the regulatory scope that have registered within the stipulated time remains very low.