Nearly a year after a parliamentary probe committee submitted its report on the crisis-ridden cooperatives, Nepali Congress General Secretary Gagan Thapa raised the issue in Parliament a few days ago.

This time, Thapa criticised the government for failing to provide relief to thousands of depositors whose money was embezzled by numerous cooperatives in various parts of the country.

When in opposition before joining the government in July last year, the Congress had pressed the Pushpa Kamal Dahal-led government to form a powerful inquiry committee to study crisis-ridden cooperatives.

Now in power, the largest party in Parliament has been accused of retreating from its commitment to delivering justice to cooperative victims. But the party’s General Secretary Thapa took aim at the government for failing to address the cooperative victims’ problem.

Speaking in the House of Representatives on August 22, Thapa accused the government of not properly heeding the voices of cooperative victims despite clear recommendations from the Surya Thapa-led special parliamentary probe panel.

“Not a single victim has been fully reimbursed even after the committee submitted its report,” he said. He even questioned the government’s intent in addressing the cooperatives sector’s deepening woes.

The parliamentary committee, formed last year after months of Congress obstruction of the House, found Rabi Lamichhane, chair of the Rastriya Swatantra Party (RSP), responsible for misusing millions of rupees from cooperatives while serving as managing director of the now-defunct Gorkha Media Network. He was managing director of the media company before joining politics in 2022. Many others were also implicated in cooperative scams.

According to Congress General Secretary Thapa, over 50,000 depositors still have their money stuck in troubled cooperatives, with only about 4,000 having recovered their savings.

He said the government must prioritise repayment for small depositors to restore public confidence in the cooperatives sector.

He added that because of the government’s failure to ensure justice to the depositors, even cooperative frauds were getting sympathy.

An economic reform report prepared by former finance secretary Rameshore Khanal had recommended allocating Rs10 billion to ensure repayment of deposits below Rs500,000. The government, however, has yet to implement that suggestion.

The Khanal-led economic reform commission, formed last October, also identified cooperative mismanagement as a pressing problem and urged structural reforms to safeguard depositors.

This year’s budget also addressed deposit protection, proposing that up to Rs500,000 deposited in the cooperatives will be safeguarded through a Deposit and Credit Protection Fund. While last year’s budget made a similar promise, it was not implemented, citing the lack of procedures required for that.

Meanwhile, the National Cooperative Regulatory Authority (NCRA), established in January through a Cooperative Ordinance that replaced the National Cooperative Development Board, has struggled to get off the ground.

Earlier, an absence of a full-fledged chairperson and expert member was blamed for the authority’s lacklustre for months.

Initially hamstrung by an incomplete board, the authority now has a chair and expert members in place, but its work has been limited to internal management and drafting procedures.

“Our core area of work is the supervision of the cooperatives sector, which we will start shortly,” said Ramesh Chaulagain, a board member and cooperative expert. He said that NCRA remains understaffed but hoped the authority would soon become fully functional with staff transfers from Nepal Rastra Bank and the civil service starting to fill the gap.

Congress General Secretary Thapa, however, warned that the government cannot afford further delay. “The victims are waiting, the crisis is deepening, and trust in the cooperatives sector is eroding,” he said. “Immediate action is necessary, starting with repayment to small depositors.”

NCRA, established to handle the crisis, is understaffed and ill-equipped to carry out the procedures smoothly, said Thapa.

From Nepal Rastra Bank, 29 staff members were supposed to be deputed to the NCRA, and 14 from the civil service according to an officer at NCRA. However, only 7 civil servants and 4 staff from Rastra Bank have joined so far.

“We have not been able to get a legal expert, so we have had to hire one from outside. Although the organisation should have a total of 74 employees, it still falls short,” the officer said. “We had also held discussions with Rastra Bank regarding staff, but it, too, is facing a shortage of human resources. This has made it difficult for us to carry out our work. Nevertheless, despite limited resources, we will be able to achieve some concrete results by mid-September.”

Meanwhile, Thapa said that the NCRA was established after tireless efforts but the authority has struggled to function effectively. Hundreds of thousands of cooperative victims had pinned hope on the authority as politicians pledged to form a high-powered authority that would secure their deposits and strictly monitor the cooperatives sector.

Yet, it remained dysfunctional for months because of the government’s failure to appoint its chief and other board members for a long time.

Arjun Pokhrel, who retired a few months after the formation of NCRA as secretary at the Ministry of Land Management, Cooperatives, and Poverty Alleviation, was entrusted with the responsibility of its chairperson until a dedicated chair was appointed. Following his retirement on April 15, Kedar Nath Sharma, the ministry’s current secretary, was assigned the role in a stopgap arrangement.

Officials had said the authority would gain momentum once it gets a dedicated chair and other members.

On May 25, the NCRA issued a public notice calling for applications for the positions of chair and expert members. Six people applied for the chair’s positions, and five candidates were selected as expert members.

On July 15, the government appointed Khagaraj Sharma as the chair of NCRA for a four-year term. Soon after Sharma’s appointment, other board members were also appointed. However, the authority is still stuck in its procedural work.

During the interim leadership of both Pokhrel and Sharma at the NCRA, the drafting of work procedures was said to be underway. The NCRA repeatedly claimed that once these procedures were finalised, it would be able to function more effectively, a claim that continues to this day.

Chaulagain, however, says that the task of drafting the procedures for monitoring financial institutions is a technical one, and therefore will take more time.

It has been almost one and a half months since Khagraj Sharma was appointed head of the NCRA, and questions are being raised as to why the authority has not been able to function effectively.

Sharma, however, insists that they are moving forward with the drafting of 10 to 12 laws related to cooperatives.

“Until visible results are achieved, it may appear as though no work is being done,” Sharma said. “But in fact, we are working.”