Your cooperative has frozen your savings: how to get your money back

Nepal does not have one cooperative regulator. Since federalism, registration and supervision are split three ways, and the split decides who has the file on your institution. The Centre for Investigative Journalism Nepal describes the division as it operates in practice: cooperatives working within a single local level are registered and supervised by that local government, those operating across more than one local level within a province by the provincial authority, and those spanning more than one province — along with those holding above a threshold of deposits, reported as Rs 50 million — by the federal Department of Cooperatives.

This is not a technicality you can skip. A ward office cannot act against a federally registered cooperative, and the Department of Cooperatives will not take a complaint about a single-palika savings group. People lose months writing to the wrong body, and the wrong body rarely tells them where to go instead. Establish the registrar first, in writing, and address everything afterwards to that office by name.

The answer is usually printed on the document you were given when you joined. Your membership certificate and the cooperative's registration certificate name the registering authority and carry a registration number. If you no longer have either, ask a fellow member, check the cooperative's own notice board or letterhead, or ask the ward office at the address where the cooperative is registered — local governments hold the register for the institutions they registered themselves and can usually tell you if an institution is not theirs.

Alongside the registrar there is now a dedicated supervisor for the kind of cooperative most people lose money in. The National Cooperative Regulatory Authority, based at Pulchowk in Lalitpur, describes its purpose as regulating cooperative institutions primarily engaged in savings and lending to ensure good governance, and it lists complaints and petitions — explicitly including savings not returned — among the services it provides. Its published contact number is 01-5010130 and its email is [email protected].

The Department of Cooperatives sets out its own regulatory functions plainly, and one of them is the step that everything in this guide depends on: recommending the declaration of a problematic cooperative institution. The same list includes inspection, off-site and on-site monitoring, complaint hearings, audit follow-up, appointment of an auditor where the law requires it, and appointment of a liquidator on dissolution. Those are the levers a registrar has, and a well-documented complaint is what makes a registrar reach for them.

One door you can rule out immediately. Nepal Rastra Bank regulates banks and financial institutions, microfinance and payment systems, and its licensed-institution counts cover class A to D banks and finance companies — not savings-and-credit cooperatives. Its financial consumer grievance portal exists and is the right route for a bank dispute, but a cooperative that will not return your deposit is outside that perimeter. Sending your complaint there will cost you weeks and produce a referral at best. Keep the registrar's name, office address and your cooperative's registration number written down with your passbook, because every letter and claim form from here refers back to those three details.

Section 104 of the Cooperatives Act 2074 is the provision that turns a failing cooperative into a case. It gives the power of declaration to the Ministry, acting on a recommendation from the Registrar, or on the recommendation or declaration of a commission formed by the Government. Members do not declare a cooperative problematic and neither does the press; the Registrar investigates and recommends, and the Ministry decides.

The grounds the Registrar may recommend on are listed, and they read like a description of what members are already experiencing. They include the commission of any act against the interests of members, failure to meet financial obligations or a risk of insolvency, inability to refund member savings on the terms agreed when the money was deposited, operating in violation of the Act or the institution's own bylaws, and a serious financial crisis.

One ground matters more than the others because it is the only one members control directly. Section 104 contemplates a declaration where at least twenty-five members file complaints about delayed refunds of their savings and an investigation confirms the violation. That is the lever. Twenty-five separate, dated, individually signed complaints from twenty-five members, each attaching evidence of a specific unpaid withdrawal request, is a materially different document from one angry group letter, and it is the form the section is written around.

Organise it as a file rather than a protest. Each complaint should name the member, the membership number, the account or deposit number, the dates and amounts of the deposits, the date the withdrawal was requested, how it was requested, what the cooperative said in reply, and the amount still outstanding. Attach copies — never originals — of the passbook pages, deposit receipts, fixed-deposit certificates, any SMS or written acknowledgement, and the member's citizenship certificate. Number the pages and keep an identical copy for yourself.

Submit the bundle to the registrar you identified, get it entered on the office's incoming register, and take away a stamped receipt showing the date and the registration number of the submission. That receipt is what lets you follow up without starting again, and it is what proves later that the complaint existed on a particular date. If the office will not stamp a copy, send it again by registered post and keep the postal receipt with the file.

Be realistic about the timetable. The Kathmandu Post's August 2026 account describes 29 institutions declared troubled against victim organisations' estimate of more than 500 that have stopped paying, so declaration is the exception rather than the rule, and it usually follows sustained, organised, evidenced pressure from members rather than a single complaint. It is still worth doing, because nothing else in this guide is available until it happens.

The first change is to the people who were running the institution. Section 111 suspends the authority of the board, the manager and the employees automatically — ipso facto — from the date the Management Committee is formed under the Act. They do not resign and they are not dismissed; their power simply stops. The Committee may temporarily bring individuals back to help manage assets and settle liabilities, and anyone brought back in that limited capacity carries responsibility for the functions assigned.

The second change is that a government body takes over. Section 105 provides for the formation of a Management Committee, and Section 106 gives it the functions, duties and powers of the General Meeting, the Board and the Accounts Supervision Committee together. That is total control: it takes custody of the institution's property, compiles accurate information on assets and liabilities, prepares records of members' and depositors' savings, recovers outstanding debts, and represents the institution in legal proceedings.

The third change is that assets hidden in other people's names become reachable. Section 106 lets the Committee seize assets of the organisation kept in the name of a director or an employee, and to auction them to recover funds. It also lets the Committee investigate directors, employees and their family members who may have diverted depositors' money into unauthorised enterprises, and to seize those assets for recovery and repayment. Separately, Section 126 allows the Registrar or an authorised officer to recommend freezing transactions, bank accounts and property, which the relevant agency then executes.

In Nepal this work is done by a standing office. The Office of the Problematic Cooperative Management Committee sits at Buddhanagar in Kathmandu under the Ministry of Land Management, Cooperatives and Poverty Alleviation, and its published functions are asset management and liability resolution, debt collection and loan settlement, processing depositors' claims, property auctions and liquidation, and public notices on rehabilitation. Its listed telephone numbers are 01-4771999, 01-4770932, 01-4770474 and 01-4771681, and its email is [email protected].

That office publishes something members often do not realise is public: the lists of borrowers and debtors of particular troubled cooperatives, alongside auction announcements and loan-settlement notices. If you are a depositor in a declared institution, those lists are worth reading. The money that pays you back comes from those borrowers, and members who recognise names, addresses or assets on a debtor list have on occasion given the Committee the lead it needed.

Not every declaration ends in liquidation. Section 113 requires an audit report to be prepared, and Section 114 lets the Management Committee take remedial action where the audit indicates the institution could resume operations — ordering the board to carry on management, calling for an interim committee formed from member shareholders, dissolving the board and convening a general meeting to elect a new one, entrusting the institution to the central sectoral cooperative organisation or the National Cooperatives Federation on a credible action plan, or any other remedial measure it considers appropriate. Either way, a declaration is not the moment your money reappears; it is the moment a competent body acquires the power to go and find it, after which come inventory, audit, claim verification, recovery and only then payment.

Once the Management Committee takes control it must publish a public notice in a national-level daily newspaper calling on members, depositors and creditors to submit their claims, and Section 112 requires that notice to allow a time limit of at least fifteen days. Fifteen days is a floor, not a norm, and it runs from publication in a newspaper you may not read. If your cooperative is anywhere near declaration, check the notice sections of the national dailies and the Committee's own website regularly rather than waiting to be told.

The Office of the Problematic Cooperative Management Committee operates an online claim system — अनलाईन माग दाबी — through which affected depositors submit applications, and it publishes guidance notices about submitting those applications for named institutions. Claims are institution-specific: a notice inviting online claims for one cooperative does not open a window for another. Read the notice for your own institution and follow the form of application it specifies.

The Committee has also published notices requiring a self-declaration form from depositors whose savings exceed one crore rupees. If that is you, expect the larger claim to be examined more closely and to be asked where the money came from, which is a normal part of a process operating under anti-money-laundering obligations rather than a sign that your claim is doubted. Prepare the source-of-funds trail — sale deeds, remittance records, retirement settlement, loan documents — before you are asked.

Your claim is checked against the institution's own records, which is the single most important thing to understand about the evidence. The Committee prepares records of members' and depositors' savings from what it takes custody of, and your documents have to reconcile with those. Where a cooperative kept sloppy or deliberately incomplete books, a depositor with a complete personal file is in a far stronger position than one relying on the institution's honesty.

Build the file now, before any window opens. It should contain the passbook with every entry, individual deposit receipts and vouchers, fixed-deposit or bachat patra certificates, the membership certificate and share certificate, bank statements showing transfers into the cooperative, any cheque counterfoils, SMS or written confirmations of deposits and of refused withdrawals, and a copy of your citizenship certificate. Photograph every page and keep the images somewhere that is not your phone.

If your passbook or certificates are lost, you are not automatically out. Reconstruct what you can from your own bank statements, from the cooperative's own correspondence, from cheque records and from other members who deposited alongside you, and say plainly in the claim what is missing and why. A claim that admits a gap and evidences around it survives verification far better than one that quietly overstates.

Finally, keep one member of the family responsible for follow-up and keep a log — date, office visited or telephoned, name of the official, what was said, what was promised. Refunds in this system are being processed in verified batches, and the Kathmandu Post reported the Committee's chair setting a target of verifying and processing at least 500 applications a day. In a queue that size, the depositor whose file is complete and whose contact details are current is the one who gets paid without a second round of correspondence.

Section 108 sets the order in which the liabilities of a problematic cooperative are paid, and it is unusually favourable to ordinary savers. Payment of members' savings, on the terms and conditions set at the time the money was deposited, comes first. Government dues or claims on the assets come second. Persons who paid an advance for an apartment or land come third. General creditors of the institution come last.

The section also faces the fact that assets usually do not cover liabilities. Where they do not, the Management Committee may distribute what exists proportionally among members, and in doing so it is required to accord priority to small depositors as prescribed. Pro rata is the realistic outcome in most declared institutions, and the phrase as prescribed is what lets a procedure published later fix the actual thresholds and instalments.

That procedure now exists. The Ministry of Land Management, Cooperatives and Poverty Alleviation published a procedure on the establishment and operation of a cyclical or revolving fund for returning the savings of members of problematic cooperative institutions, dated 19 Baisakh 2083 and published in the Gazette, which is what makes it operative. The Ministry's general enquiry number is 01-4211666 and its email is [email protected].

The fund is deliberately not a bailout. The Kathmandu Post reported an initial government allocation of Rs 250 million as seed capital, with later years to be set after the total repayment requirement is assessed, and described the fund as being replenished from recovery of cooperative loans and savings, sale of fixed assets, and the personal assets of board members — with directors' and family members' assets capable of being frozen and auctioned. It revolves because recovered money refills it, which is precisely why repayment tracks recovery rather than need.

Eligibility and priority are drawn tightly. The same report describes repayment as being for savers with deposits below Rs 500,000, with priority to small depositors, single women, senior citizens above 60, Dalit and indigenous communities, and persons with disabilities, and with depositors who themselves have outstanding loans or who are implicated in financial irregularities excluded until the legal claims against them are settled. If you both saved and borrowed at the same cooperative, expect your loan to be set against your savings before anything is paid in cash.

The payment structure is phased rather than proportional to loss. The Kathmandu Post described a first phase paying depositors with savings up to Rs 10,000 in full, covering around 18,000 people, and later phases paying fifty per cent of the balance at rising ceilings of Rs 50,000, Rs 100,000, Rs 200,000, Rs 500,000 and Rs 1 million. Separately it reported quarterly assistance of up to Rs 25,000 for vulnerable depositors, including the elderly and the seriously ill.

The first payments are a matter of record and so is their size. Refunds began on 17 May 2026 with Rs 1,399,216 returned to 378 small depositors of Kantipur Saving and Credit Cooperative, Pashupati Saving and Credit Cooperative and Shiva Shikhar Multipurpose Cooperative, from a revolving fund then standing at about Rs 600 million — Rs 250 million from government and Rs 350 million recovered. By early August 2026 the Kathmandu Post put the total at Rs 710 million to roughly 11,000 depositors, of which Rs 210 million was cash and Rs 500 million was adjusted against accounts. Hold those two sets of numbers next to each other before you plan around them: Rs 710 million returned against Rs 46 billion owed to 76,000 people.

This is where most people reading this actually are. The Kathmandu Post's August 2026 report contrasts 29 formally declared institutions with victim organisations' estimate of more than 500 cooperatives that have stopped returning deposits without any formal status, and it quotes campaigners saying the government will refund only from officially declared institutions while remaining silent about the rest. The refund machinery described above simply does not reach you yet.

Start inside the institution, because the law still treats you as a member with rights rather than a customer. Make a written demand for your savings addressed to the board, delivered to the registered office, with an acknowledged copy retained. Ask in the same letter for the audited accounts of the last completed financial year and for the date of the next general meeting. A cooperative that is merely illiquid will answer; one that will not answer has told you something.

Then use the general meeting, which is the only forum where the board must account for the loan book, the withdrawals being met and the recovery position. Attend it, put your questions in writing beforehand so they are minuted, and take a copy of the minutes — minuted admissions about unpaid savings are strong evidence later.

Escalate to the registrar you identified in the first section, using the twenty-five-member structure described earlier, and to the National Cooperative Regulatory Authority in parallel where the institution does savings and credit business. Registrars have real powers short of declaration — inspection, on-site and off-site monitoring, complaint hearings, audit follow-up, appointment of an auditor, corrective directions, and the appointment of a liquidator on dissolution — and inspection is often what produces the paper trail that a later declaration rests on.

There is also a specialist forum in the sector's institutional map. The Ministry of Land Management, Cooperatives and Poverty Alleviation lists a Loan Recovery Tribunal among the cooperative bodies under it, alongside the Regulatory Authority, the Cooperative Training and Research Centre and the Office of the Problematic Cooperative Management Committee. Ask your registrar or the Authority directly whether your dispute falls to that tribunal before you assume a district court is your only judicial route.

Organise with the other members rather than negotiating alone. Cooperatives under pressure tend to settle with whoever is loudest and quietest at the same time — a partial payment in exchange for silence — and the members who accept those are usually paid from money that should have been distributed pro rata. A members' committee that keeps a shared register of who is owed what, dated and signed, is both a fairness mechanism and a ready-made evidence bundle if a declaration follows.

Keep depositing nothing. It sounds obvious, and it is the single most commonly ignored instruction in this whole area. Cooperatives in trouble frequently offer a higher interest rate to keep deposits rolling over, or tell members that only new deposits can restore liquidity and unlock old ones. Renewing a matured fixed deposit at a struggling institution is not a rescue of your existing money; it converts a due claim into a future one.

Illiquidity and theft look identical from the counter, and the difference decides which door you use. Illiquidity means the loans are real but not repaying; theft means the money left the institution through its own officers. Section 122 of the Cooperatives Act 2074 lists the acts treated as offences and the list describes the second pattern closely: embezzlement of the organisation's assets, savings or share amount by a board member, manager or employee; use of members' savings for purposes other than those stated in the Act, rules or bylaws; disbursing credit beyond the prescribed amount without collateral or security; lending to false enterprises; issuing credit against unnaturally excessive valuations of collateral; and preparing a false audit report.

The penalties are graded by the amount involved. Section 124 sets imprisonment rising with the sum — up to a year for amounts up to Rs 1 million, two to three years between Rs 1 million and Rs 5 million, and continuing upward through bands to eight to ten years where more than Rs 1 billion is involved — and provides that the claimed amount is recovered and an equal amount imposed as a fine. Accomplices face half the punishment of the principal offender, and liability extends to chief executives and officials of an organisation.

Crucially, this is a state prosecution. Section 130 makes the Government of Nepal the plaintiff in these cases, which means you are not funding a private lawsuit — but it also means the case proceeds at the state's pace and on the state's assessment of the evidence, and you cannot withdraw it in exchange for a private settlement. Your role is to be a complete, credible complainant.

Report it to the police. Nepal Police publishes a police control number of 100, a toll-free line of 16600141516, and an online citizen assistance and complaint management system alongside its written ujuri and gunaso route. For organised cooperative embezzlement the Central Investigation Bureau at Lazimpat, Kathmandu is the specialist unit; its published number is 01-4511776 and its email is [email protected], and its own case notices cover banking offence and cooperative fraud investigations.

Bring the same evidence file you built for the claim, plus anything that shows where money went — property the directors acquired, businesses they opened, vehicles, the names on a debtor list published by the Management Committee that you recognise as relatives or associates of the board. Section 106 gives the Committee power to investigate directors, employees and their family members who diverted depositors' money into unauthorised enterprises, so a specific, evidenced allegation is more useful to it than a general one.

Understand what a criminal case does and does not do for your money. A conviction and the recovery ordered under Section 124 can feed the pool from which depositors are paid, and freezing under Section 126 can stop assets being sold before that happens, but neither is a payment to you. Depositors are still paid through the Section 108 priority and the revolving fund procedure, not directly by the court. Pursue both routes; expect only the first to produce cash.

Time matters more here than anywhere else in this guide. Assets get sold, transferred to relatives and mortgaged while a case is being assembled. The complaints that lead to freezing orders are the ones filed early and specifically enough that an agency can act on them, which is another reason to build the evidence file in the weeks after your first refused withdrawal rather than in the year after the declaration.

Plan for partial recovery over years. That is not pessimism; it is what the published figures describe. Rs 710 million returned to about 11,000 depositors between May and August 2026, against roughly 76,000 depositors owed about Rs 46 billion, with a fund seeded at Rs 250 million and refilled from recovery — and with the Kathmandu Post reporting officials targeting the return of deposits up to Rs 500,000 within a year. If your balance is small, your prospects are genuinely decent. If it is large, expect instalments capped by phase.

Do not restructure your life around the money coming back. Families in this position routinely delay medical treatment, keep a child out of a paid course, or take a high-interest loan against the expectation of a refund, and the interest on that loan runs at a rate the recovery process cannot match. Treat any refund as a windfall that arrives on someone else's timetable, and rebuild a separate emergency fund in a bank account in the meantime, however small the contributions.

Then guard against the second fraud, which is aimed specifically at people in your position. It arrives as a phone call or a Facebook message from someone claiming to be connected to the Management Committee, a ministry, a lawyer with contacts, or a members' association, offering to move your file up the queue, to get your claim verified faster, or to recover money the official process has written off — for a commission or an advance fee. Nobody can do this, and paying is how a depositor becomes a victim twice.

The tells are consistent. A genuine process communicates through published notices, a claim form and an office you can walk into; it does not solicit you individually, it does not ask for money to process a claim, and it does not need your bank credentials, your OTP or the original of your citizenship certificate. Any demand for an advance payment in exchange for a refund is fraudulent by definition, because the refund pool is paid out under a gazetted procedure, not by negotiation.

Verify anything you are told against the source. The Committee's notices, debtor lists and telephone numbers are published on its own site, the Ministry publishes the fund procedure, and the registrar holds the register. A call to a number taken from an official website, rather than from the person contacting you, settles almost every one of these approaches.

And take the lesson forward without becoming afraid of cooperatives as a class. Most registered cooperatives serve their members honestly within a defined area. The ones that fail tend to have offered rates well above bank deposit rates, taken money from far beyond their working area and membership, lent against inflated property valuations, and resisted producing audited accounts. Those are the same signals the registrars look for — and they are visible to a member who insists on seeing the accounts before the money goes in rather than after it stops coming out.