KATHMANDU: The National Cooperative Bank Limited has pledged to operate in strict compliance with the Cooperative Act 2074 and other prevailing legal frameworks. The bank issued an official statement on Friday clarifying its position regarding the management of savings and credit operations for its member cooperative institutions.
The bank cautioned that creating new structures for managing savings and credit could lead to further complications rather than resolving existing issues. It suggested that any integration process should be conducted according to current laws, with a reliance on independent due diligence audit (DDA) reports to accurately assess assets and liabilities. The bank emphasized the importance of proper valuation of share capital, protection of member ownership, and the continuity of democratic governance systems.
The bank noted that failure to properly identify and manage risks related to credit, liquidity, and operations could negatively impact the entire cooperative financial system. It highlighted the necessity of prioritizing risk management and prudent regulation to maintain financial stability within the sector.
The statement also clarified existing legal and regulatory constraints, noting that cooperative institutions are currently limited to borrowing external credit up to 5 percent of their total assets. Furthermore, the bank explained that it cannot provide credit to any single institution exceeding 15 percent of that institution’s total assets. Despite these regulatory limitations, the bank affirmed its commitment to protecting the interests of its members, ensuring the security of capital, and maintaining public trust in the cooperative financial system.
