काठमाडौं ।
– Sharachchandra Bhandary
Nepal’s cooperative sector, comprising over 30,000 institutions and more than seven million members, plays a vital role in the country’s economy by mobilizing savings, providing credit, generating employment, and promoting financial inclusion, especially in rural areas. Despite this critical role, the Rastriya Swatantra Party (RSP) has proposed a controversial policy to handle cooperative fraud cases through dialogue rather than imprisonment. Critics warn that such a policy could undermine legal accountability and threaten depositors’ funds across the sector.
Krishna Prasad Sharma, economist, opposes the idea of forgiving cooperative operators and managers accused of misappropriating depositors’ funds, asserting that such cases should be handled through dialogue rather than imprisonment. He describes the RSP’s proposal as an irresponsible and immature decision.
First and foremost, RSP Chair Rabi Lamichhane himself faces multiple legal challenges. The money laundering and organized crime case against him will not be withdrawn immediately. While hearing Lamichhane’s petition for case withdrawal recently, the bench at Kaski District Court ordered that the case remain active. In addition, cases have been filed against Lamichhane in Kathmandu, Kaski, Chitwan, Rupandehi, and other districts, highlighting the extent of his legal entanglements. The Supreme Court has concluded that Lamichhane appears to be involved in cooperative fraud based on available evidence. This situation underscores a clear conflict of interest. By proposing to release cooperative operators who are willing to repay debts, the party is effectively using political promises to interfere with ongoing judicial proceedings, undermining the independence of the legal system.
The allegations against Lamichhane involve substantial sums claimed in multiple cooperative fraud cases filed by district government attorneys and police investigations. In the Sano Paila Savings and Credit Cooperative case, he and others are accused of misappropriating 115.6 million rupees, with parts of the funds reportedly diverted to an entity associated with him. In the Swarnalaxmi Multipurpose Cooperative case, charges include misappropriation of approximately 1.199 billion rupees. In the Sahara Chitwan Multipurpose Cooperative case, the accused are alleged to have misused around 523.3 million rupees. Parliamentary investigations have also found that about 650 million rupees from several cooperatives were allegedly diverted into a media company linked to Lamichhane, and reports indicate that across multiple cooperatives and associated entities, the alleged total misappropriation could involve tens of billions of rupees.
These allegations are part of ongoing legal proceedings, with multiple bail orders issued as courts examine the evidence. Lamichhane has posted bail amounts totaling approximately 27.9 million rupees across different cases.
Nepal’s law, including the Cooperative Act, 1992 (as amended), mandates accountability for cooperative fraud, and the Money Laundering Prevention Act, 2064 (2008), criminalizes the concealment or illegal transfer of money derived from criminal activity. No political platform can override these statutory procedures.
The cooperative sector in Nepal is extensive, with roughly 30,000 to 34,000 institutions registered across the country, including primary, multipurpose, agricultural, savings and credit, and other specialized cooperatives. Approximately 25,000 to 30,000 of these are actively engaged in financial activities such as savings and credit services, while the rest operate in agriculture, dairy, consumer services, and trade, according to the Department of Cooperatives.
Around 7.3 to 7.4 million Nepalis are members of one or more cooperatives, accounting for roughly 23 percent of the population, with women representing a significant share of membership. The sector also provides employment for around 90,000 to 94,000 people directly, with many more indirectly connected through supply chains, agriculture, and local enterprise development.
Financially, cooperatives have mobilized billions of rupees in savings and share capital, while loan disbursements exceed 900 billion rupees, demonstrating their critical role in providing credit to individuals, small businesses, farmers, and local enterprises. The cooperative sector is estimated to contribute approximately 10 percent of Nepal’s Gross Domestic Product, serving as a key pillar of national development and financial inclusion, especially in rural and underserved areas.
Second, the party’s manifesto slogan — “The goal is not to imprison people, but to return the money to depositors” — overlooks a critical legal reality. Many cooperative funds have already been misused, transferred, or embezzled. Simply releasing a suspect does not guarantee that these funds will be returned. Under existing laws, mechanisms such as judicial oversight, asset recovery, and prosecution are essential to protect depositors and enforce financial accountability. Circumventing these mechanisms could weaken the rule of law and directly conflict with Sections 66–71 of the Cooperative Act, which provide for investigation, prosecution, and punishment of fraudulent cooperative operators.
Finally, implementing this policy would create a dangerous precedent in Nepal’s financial sector. Financial institution executives could feel emboldened to misappropriate deposits, knowing that if caught, they might avoid imprisonment by merely promising to repay the money. Such a system would contravene both the Cooperative Act and the Money Laundering Prevention Act, which are designed to ensure accountability, deter fraud, and protect depositors.
While the RSP’s manifesto also proposes positive measures, such as linking cooperatives and microfinance institutions to a credit information center, introducing automated systems, and creating a unified savings protection fund, these initiatives cannot justify a policy that undermines legal accountability. Dialogue and settlement can be encouraged, but they must occur within the boundaries of the law, not as a political shortcut to bypass criminal responsibility.
In conclusion, the “Listen, Not Lock Up” policy, if implemented as stated, would violate Nepal’s law, including the Cooperative Act and the Money Laundering Prevention Act, and weaken both financial discipline and the judicial process. Protecting depositors’ funds requires strict adherence to legal procedures, not political exceptions that risk normalizing financial misconduct.
प्रकाशित: ११ फाल्गुन २०८२, सोमबार
