April 8: The government will now monitor savings and credit cooperatives through chartered accountants (CAs) and registered auditors (RAs). As the financial risk of cooperatives is increasing, the federal government is preparing to tighten  the monitoring of cooperatives by hiring more manpower under contract basis.

Rudra Prasad Pandit, registrar of the Department of Cooperatives said, “The department does not have efficient and sufficient manpower to monitor the cooperatives. We will tighten the monitoring even by hiring CAs and RAs on a contract basis.” Pandit further said that action would be taken based on the issues surfacing after monitoring.

Although the posts of CA and data analyst have been arranged within the department for monitoring cooperatives, the posts have not been filled yet. Therefore, the department has put forward a plan to get CAs and RAs to work on contract basis. The department informed that a budget for this plan has been demanded from the Ministry of Land Management, Cooperatives and Poverty Alleviation. If the budget is not provided, then the department will manage it from internal resources.

According to the provisions of the constitution, the rights from registration to regulation of cooperatives have reached to the local level. On the basis of the scope of work of the organization, all three levels of governments can regulate the registration of cooperatives. However, the cooperatives have not been regulated due to lack of sufficient manpower at the state and local levels.

There is a provision that the federal government can also monitor the cooperatives dealing with transactions more than Rs 500 million. Accordingly, the big cooperatives will be monitored regularly in collaboration with the state and local governments, said Registrar Pandit.

Out of 29,886 cooperatives across the country, only 125 are under the federal government. Similarly, there are 6002 under the state government and 23759 under the local government.

Cooperatives come second in terms of financial transaction after commercial banks. Currently, cooperatives across the country have mobilized more than Rs 1 trillion. Due to the lack of effective regulation by the government, some cooperatives have been mobilizing the money of the general savers indiscriminately. Institutions have become problematic when such operators embezzle money. From Oriental to civil cooperatives, more than 100 of them have been in trouble and billions of public deposits have not been returned.