Troubled Ambe Koshi Cooperative begins refund process for small depositors

Morang, April 14: The Koshi Province Government has formally launched the process of refunding savings to depositors affected by troubled cooperatives, marking a major step toward addressing financial irregularities in the sector.

In the first phase, 287 depositors of Ambe–Koshi Savings and Credit Cooperative will receive refunds. Priority has been given to those with savings below Rs. 20,000.

The refund process is being carried out by the Problematic Cooperative Management Committee formed under the provincial Ministry of Industry, Agriculture and Cooperatives.

The Itahari-based cooperative has 9,559 shareholders and a share capital exceeding Rs. 40.6 million. However, it faces liabilities of around Rs. 426.09 million to depositors. So far, 1,173 depositors have filed claims totaling approximately Rs. 248.8 million, according to the committee.

Investigations have identified former chair Phadindra Bahadur Purbachhane as the main defaulter. He is accused of borrowing nearly Rs. 200 million from the cooperative and misusing the funds for personal purposes, triggering the financial crisis.

Following serious irregularities, the provincial government declared the cooperative “problematic” in mid-December 2024. The management committee then took control of over 2,000 files and launched a detailed investigation.

The committee has since suspended the authority of the board and staff, frozen 42 land plots linked to the cooperative and its operators, and issued a 35-day public notice urging borrowers to repay loans. Preparations are underway to auction properties of three major defaulters.

Currently, Rs. 13.8 million has been deposited in the cooperative’s bank account, while liabilities worth Rs. 19 million have been managed through loan and savings adjustments.

According to Minister for Industry, Agriculture and Cooperatives Israel Mansuri, a total of Rs. 2.857 million will be distributed to 287 depositors in this initial phase. He described the initiative as a model for the rest of the country.

The minister added that once payments to depositors with savings below Rs. 20,000 are completed, the process will expand to include those with deposits of up to Rs. 100,000.