National Cooperative Bank Raises Concerns Over Cooperative Act Amendments, Calls for Stronger Risk Management

National Cooperative Bank Limited has issued an official statement addressing concerns raised by members and stakeholders regarding the implementation of recent amendments to the Cooperative Act, 2074. In a statement released on Friday following a decision by its Board of Directors, the bank reaffirmed its commitment to complying with existing laws and directives issued by Nepal Rastra Bank, the National Cooperative Regulatory Authority, and the Office of the Cooperative Registrar. The bank cautioned that introducing new structures to manage savings and credit transactions among member cooperatives could create additional complications rather than resolve existing problems. It emphasized that mergers and other restructuring processes should follow prevailing laws, with independent Due Diligence Audit (DDA) reports serving as the basis for realistic asset and liability valuation. The bank also stressed the importance of protecting members’ ownership rights and maintaining democratic governance. The statement further highlighted the need to properly manage credit, liquidity, and operational risks to safeguard the broader cooperative financial system. It noted that existing regulations restrict external borrowing by cooperatives to 5% of their total assets, while the bank itself cannot lend more than 15% of a single institution’s total assets. Despite these limitations, the bank said it remains committed to protecting members’ capital, strengthening institutional governance, and maintaining confidence in Nepal’s cooperative sector.