The government has officially formed the Cooperative Loan Recovery Tribunal (CLRT) to bolster efforts to recover cooperative funds, as billions in public deposits have been misappropriated through troubled cooperatives across the country.

A Cabinet meeting on June 27 appointed Kirti Bahadur Basnet as the tribunal’s chair, and Basanta Parajuli of Dhankuta and Govinda Sharma Gaire of Tanahun as members.

According to Ganesh Prasad Bhatta, spokesman for the Ministry of Land Management, Cooperatives and Poverty Alleviation, the new chair and members have yet to take the oath of office.

Earlier, while presenting the budget for the fiscal year 2025-26, Deputy Prime Minister and Finance Minister Bishnu Paudel had announced plans for the formation of a tribunal for classifying, consolidating, and strengthening the cooperative sector.

Following that announcement, the government appointed the tribunal’s leadership. The government envisions it as an additional mechanism to recover cooperatives funds. However, Kashi Raj Dahal, former chair of the Crisis Cooperative Management Committee, said the idea of a tribunal is not new as it was already outlined in the Cooperatives Act 2017.

Back in January, the government had also formed the National Cooperative Regulatory Authority (NCRA) through an ordinance. The NCRA, which replaced the National Cooperative Development Board, was envisioned as a powerful agency to help depositors recover their money.

Dahal explained the distinct roles of the two bodies.

“While the NCRA is tasked with registering and supervising cooperatives and ensuring legal compliance, the tribunal will function more like a judicial body, where victims can lodge complaints and seek justice.”

Dahal also criticised the government for lack of clarity on the tribunal's jurisdiction.

“Since the government wants to confiscate the assets of cooperatives operators, it would have been better had the tribunal’s powers been clearly defined,” Dahal said.

While the tribunal’s leadership has been appointed as announced during the budget presentation about a month ago, the NCRA, which was established almost six months ago, remains non-functional as the government failed to appoint its chief and members.

On May 25, the NCRA issued a public notice calling for applications for the positions of chair and expert members, setting a 15-day deadline. Six people applied for the chair’s position, and five candidates were selected as expert members. A recommendation committee is now handling the shortlisting process.

Among the applicants for the chair are Arjun Prasad Pokhrel, a former secretary at the Ministry of Land Management, Cooperatives and Poverty Alleviation, who had also served as the chair of the NCRA before retiring from civil service.

Other contenders for the top post include Paritosh Paudel, a board member of the National Cooperative Federation; Hari Nepal and Narayan Prasad Paudel, both former executive directors at Nepal Rastra Bank; Khagaraj Sharma, former member secretary of the Cooperative Development Board; and Anil Raj Paudel.

According to the Public Service Commission procedures, the selection process has already begun, and interviews for the chairperson have started. However, one candidate missed the interview, citing illness. As per the commission’s rules, a final decision cannot be made until all shortlisted candidates have been interviewed.

The NCRA issued a notice last Friday, giving the absent candidate a week to appear for the interview. Authority Secretary Raveen Dhakal stated that if the candidate fails to attend by the deadline, which is upcoming Friday, the authority will forward the selected candidates’ names to the ministry.

“In the case of members, the process could not move forward after one of the candidates filed a case in court faulting the selection procedure. The selection is pending but as for the chairperson, we will be making a decision soon,” Dhakal said.