The House of Representatives (HoR) has rejected the government proposal to amend the Cooperatives Act to ban an individual from depositing more than Rs 2.50 million in a cooperative.
The government had proposed a ban on personal saving of Rs 2.5 million by amending section 52 of the Cooperatives Act. But the Law, Justice and Human Rights Committee of the HoR rejected the amendment proposal that also required those currently saving more than Rs 2.5 million in cooperatives to reduce their saving to below that ceiling within five years.
The government had brought a bill for amendment of a few Nepali laws for alleviation of money laundering and promoting business environment. The bill had proposed amendment of many acts including the Cooperatives Act.
But the Law, Justice and Human Rights Committee of the HoR then rejected the provision proposing a limit on savings on cooperatives.
The HoR then passed the bill removing the amendment of the Cooperatives Act proposing a limit on savings on cooperatives through majority. Rastriya Swatantra Party (RSP) and RPP lawmakers voted against the bill.
RSP lawmaker Swarnim Wagle has expressed displeasure at the committee for removing the provision proposing a ban on personal saving of Rs 2.5 million in cooperatives. He has claimed that the Cooperatives Act was made toothless by registering 693 amendments on the bill about cooperatives on September 19, 2017 that resulted in the problems now seen in the sector. “The process has been given further continuity instead of stopping it,” Wagle has stated.
The government had also proposed that the Nepal Rastra Bank (NRB) should get to supervise, inspect and regulate cooperatives with paid-up capital of more than Rs 250 million or annual transaction of over Rs 500 million. But the committee raised that threshold of paid-up capital to more than Rs 500 million or annual transaction of over Rs 500 million, and inserted a provision allowing such regulation by the central bank only on request of the Department of Cooperatives.
Another RSP lawmaker Ashok Chaudhary has taken swipe at the committee for increasing that threshold. Law Minister Dhan Raj Gurung, however, has claimed that the committee passed the bill unanimously.