The government has failed to manage problematic cooperatives. Although the government formed a problematic cooperative management committee six years ago for the management of organizations that could not return the depositor’s money, it has not been able to distribute the assets and liabilities even in a single case.

There is a provision in the Cooperatives Act 2074 that that allows the Ministry of Land Management, Cooperatives and Poverty Alleviation to declare a cooperative as problematic upon the recommendation of the Registrar of the Department of Cooperatives. Following the declaration, there is a provision in the law for the committee to investigate the organization's assets and liabilities and settle the arrears.

According to this arrangement, the Federal Government formed the 'Problem Cooperative Management Committee' on January 13, 2018. So far, the government has declared 15 institutions as problematic and assigned the responsibility to the committee to settle the issue, but none of the institutions have been held fully accountable.

According to member secretary of the committee, Keshav Prasad Paudel, the embezzled amount of the depositors of Kuber Savings and Loan Cooperative and Standard Multipurpose Cooperative has been returned to the depositors as of the last fiscal year but the authorities are yet to recover the loans given by both the organizations. A commission formed by the government to study the problematic cooperatives had suggested to solve the problems of the cooperatives by forming a management committee. 

According to the Cooperative Act, there is a provision that the chairman of the seven-member management committee should be a judge of the High Court or a person with similar qualifications. Similarly, there is a legal provision that among the members should be one person who has worked at the 11th level in the civil service, one person who has worked at the 9th level in a bank and financial institution or a chartered accountant, among others.