KATHMANDU – Ghanashyam Neupane, Acting General Secretary of Rastriya Janamorcha, raised alarm over cooperative fraud and Nepal’s deteriorating economy at the opening ceremony of the Nepali Congress’s 15th General Convention in Kathmandu.
Addressing the gathering at Khula Manch, Neupane stated that ordinary citizens have lost billions of rupees saved in cooperative institutions.
He also pointed to the devastating Bhote Koshi flood, which occurred around August 26, 2026, causing extensive damage and disrupting 430 megawatts of electricity from the national grid. Neupane called for unity among all political parties to address these pressing national challenges, including the economic crisis, cooperative fraud, and the impacts of climate change.
The Nepali Congress’s 15th General Convention, inaugurated by party President Gagan Thapa, commenced today, October 4, 2026. The closed session and other programs are scheduled for October 5 and 6, with elections set for October 7 and 8.
Scale of cooperative crisis
The cooperative sector in Nepal faces a severe crisis, with an estimated 500 cooperatives currently experiencing problems. Approximately Rs 250 billion (2.5 kharba) is believed to have been misappropriated from these institutions. The government has issued arrest warrants for around 1,700 individuals allegedly involved in irregularities. As of October 3, 2026, 27 cooperative fraud cases have seen settlements and judgments implemented, leading to the recovery of approximately Rs 110 million (11 crore) in loans.
The current financial challenges in the cooperative sector stem from difficulties in loan recovery due to an unstable financial environment and prolonged mismanagement. A lack of coordination among regulatory bodies, insufficient regulatory infrastructure, and a prevalent desire for quick profits have further exacerbated the problem.
Economic indicators and government response
According to Nepal Rastra Bank, the central bank, the annual point-to-point consumer price inflation stood at 5.96 percent for the first nine months of the current fiscal year, ending October 4, 2026. The country’s total foreign exchange reserves reached Rs 3,946.23 billion (25.04 billion US dollars), sufficient to cover imports of goods and services for approximately 18.8 months. The current account recorded a surplus of Rs 94.59 billion, and the balance of payments showed a surplus of Rs 90.34 billion, driven by a significant increase in remittance inflows.
The government is intensifying efforts to return savings to victims of cooperative fraud and recover outstanding loans. Small savers with deposits less than Rs 100,000 are being prioritized. The Cooperative (First Amendment) Ordinance, 2083 (2026), mandates that all cooperatives engaged in savings and credit transactions must join a ‘Deposit and Loan Protection Fund’. This ordinance aims to facilitate the return of depositors’ money within 100 days.
In response to the Bhote Koshi flood, the Ministry of Energy, Water Resources, and Irrigation is working on alternative arrangements for electricity supply to Kathmandu. Discussions have been held with the Department of Roads and Kathmandu Metropolitan City for the construction of additional underground grids.
Looking ahead
The success of the Cooperative (First Amendment) Ordinance, 2083, in recovering all misappropriated funds and returning depositors’ savings within 100 days remains to be seen. Additionally, detailed official figures regarding the number of deaths and missing persons from the Bhote Koshi flood are still unclear, with Neupane’s mention of over 1,500 deaths and 5,000 missing yet to be officially confirmed by other sources.
