KATHMANDU: The government has clarified that the funds being returned to victimized depositors are strictly those recovered from the loans of troubled cooperative institutions.

The Office of the Problematic Cooperative Management Committee, under the Ministry of Land Management, Cooperatives, Federal Affairs and General Administration, issued a press release stating that its attention has been drawn to public complaints and misconceptions suggesting that savings are being refunded using state treasury funds.

According to the Committee, the process of returning savings to small depositors—specifically those with claims under Rs 10,000 from the 20 cooperatives declared troubled—is being carried out in phases. However, a revolving fund has not yet been established.

The committee stated that the process of refunding depositors using money recovered from loan collections and asset management of the respective troubled cooperatives is continuously ongoing in accordance with current legal provisions.

The press release states, “We hereby inform everyone concerned through this release that a revolving fund has not yet been established and no such account is operational within the committee. Nevertheless, the work of refunding depositors of the respective cooperatives using funds acquired through loan recovery and asset management of troubled cooperatives is ongoing continuously as per existing legal frameworks.”

To implement the provision outlined in point number 99 of the 100-point worklist approved by the Council of Ministers meeting on March 27, 2026, the Government of Nepal, Council of Ministers, has issued the ‘Procedures for the Establishment and Operation of a Revolving Fund for Refunding Savings of Members of Problematic Cooperatives, 2026’ to be placed under the management committee.

The committee added that it has been prioritizing loan recovery, and all funds collected so far from the borrowers of the respective cooperatives are being directly returned to the depositors of those same institutions.