The appointment of the chairman of the National Cooperative Regulatory Authority (NCRA) has been delayed following the refusal of former governors of Nepal Rastra Bank to join the recommendation committee for the role.
According to a source within the Ministry of Land Management, Cooperatives, and Poverty Alleviation, the government had requested former governors Dipendra Bahadur Chhetri and Dr. Chiranjibi Nepal to join the committee. However, both declined the invitation.
The government had established the NCRA by amending the law through an ordinance with the aim of mitigating risks within cooperatives and enhancing anti-money laundering measures.
The government amended the Cooperative Act, 2074, through an ordinance in late December, dissolving the National Cooperative Development Board and establishing the regulatory authority. Minister for Land Management, Cooperatives, and Poverty Alleviation, Balram Adhikari, inaugurated the authority on January 27, 2025.
Despite nearly a month of operation, the government has yet to appoint a chairperson. Currently, Arjun Prasad Pokharel, the secretary at the Ministry of Land Management, Cooperatives, and Poverty Alleviation, has been assigned the role of acting chairperson of the authority.
The delay in the appointment process follows the refusal of the former governors to join the recommendation committee. A source from the ministry said, "The issue lies in the act, as former governors are specifically required to be part of the committee, and the available former governors have declined the offer."
Former Governor Chhetri declined the proposal, citing a mismatch in portfolio. Meanwhile, Dr. Nepal stated he was not offered the role and declined to comment further.
In addition, the executive director of Nepal Rastra Bank, Guru Prasad Paudel, and the Ministry's joint secretary, Madan Koirala, have been appointed as members of the authority. However, the appointment of an expert and a chartered accountant member is still pending.
According to the law, the recommendation committee must issue a public notice for 15 days to seek applications and recommend three qualified candidates for the chairperson's position. The government will then select the chairperson from among the shortlisted candidates.
Candidates for the chairperson's role must hold a master’s degree in economics, commerce, management, accounting, law, or cooperatives, and have at least 15 years of experience as a gazetted first-class officer or an equivalent role in national or international banks, financial institutions, or cooperatives.
The formation of the NCRA follows concerns raised by the Asia Pacific Group on Money Laundering (APG), which highlighted the weak regulation of savings and credit cooperatives in its mutual evaluation report. In response, the government swiftly amended the law through an ordinance to establish the authority.
However, since last Friday, Nepal has been placed on the Financial Action Task Force (FATF) grey list. FATF has recommended that Nepal regulate high-risk cooperatives based on their individual risk profiles.