Victims of cooperative fraud will begin receiving repayments from mid-May, according to officials. The payments will be made from a revolving fund collected by the Problematic Cooperatives Management Committee.

The fund was established last week through a Cabinet decision to facilitate the return of deposits to affected savers. The Ministry of Finance has already released Rs250 million for the fund, allocated under the current fiscal year budget for cooperative victims.

In addition, around Rs350 million has been recovered from borrowers of problematic cooperatives. Combined, the revolving fund currently stands at about Rs600 million. The committee said repayments will be made in phases, beginning with small depositors and gradually moving towards larger claims, depending on recovery from loans and assets.

Dilliram Acharya, committee chair, said the repayment process will depend on continuous loan recovery, settlement of deposits and sale of assets of problematic cooperatives.

At a press briefing on Tuesday, Minister for Land Management, Cooperatives and Poverty Alleviation Pratibha Rawal said returning money to cooperative victims remains a top government priority.

“We are making full efforts to recover loans. We have held discussions with Nepal Rastra Bank, the Office of the Attorney General and other agencies. The more we recover, the more we can return to depositors,” she said. “We have already issued notices for loan repayment. Names will be made public through a website. If loans are not cleared.”

She also warned that individuals failing to repay loans taken from problematic cooperatives will face increasing restrictions, including gradual exclusion from public services. “Loan recovery will not be easy, but the government is determined to act firmly. Strict measures may be required,” she said.

The government recently replaced the leadership of the Problematic Cooperatives Management Committee and appointed a new team, which began work on April 22. According to the committee, 20 cooperative institutions under the federal government have been declared problematic.

Around 76,444 depositors are affected, with a total of Rs4.56 billion in savings pending repayment.

Chair Acharya said the committee is working on loan recovery, settlement of deposits, internal restructuring, stakeholder consultations and preparation of an implementation plan. A detailed operational plan will also be prepared to update depositors and pressure borrowers.

The committee has also announced that a new window for claims from missed or unregistered victims will open in mid-July.

It said a “scientific and fair” procedure will be developed for the settlement of deposits. If the revolving fund is insufficient, it will be used temporarily and later reimbursed through recoveries.

The committee said it will adopt strict recovery measures, including written commitments from borrowers and instalment-based repayment plans. If necessary, it plans to publish detailed personal and family records of defaulters and impose blacklisting on family members.

In the first phase, depositors with savings of up to Rs10,000 will receive full repayment. This group includes around 18,000 depositors.

In the second phase, repayments will extend up to Rs50,000, with 50 percent of the remaining amount being paid based on recovery progress. Further phases will gradually increase repayment ceilings up to Rs1 million.

According to the committee, 17,000 depositors have savings below Rs25,000, 9,000 have between Rs25,000 and Rs50,000, and 36,522 have savings up to Rs100,000. A further 21,619 depositors have between Rs100,000 and Rs500,000, while 18,303 have more than Rs500,000.

Under an ordinance amending the Cooperative Act 2017, the revolving fund will be reimbursed through loan recovery and asset sales of problematic cooperatives. The ordinance also allows the government to provide additional funds if recoveries fall short.

It further provides for a separate revolving relief fund under the management committee for immediate repayments, maintained in a commercial bank with separate records.

Previously, the government had introduced a working procedure for a relief fund, but concerns over using taxpayers’ money led to a revised legal framework through the ordinance.

The committee said repayments will continue in phases over the coming year, with priority given to small depositors and recovery-based distribution for larger claims.