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KATHMANDU, Nov 23: The government is moving ahead with a plan to reimburse up to Rs 100,000 to people whose savings are stuck in troubled cooperatives.

The Ministry of Land Management, Cooperatives and Poverty Alleviation has prepared a working guideline that outlines how the refund process will run. The plan centers on a revolving fund meant to help depositors with smaller amounts recover their money. The draft has already reached the Finance Ministry for approval.

Ministry spokesperson Damodar Wagle said the next step is to seek the Law Ministry’s input, after which the proposal will head to the Cabinet. Once the Cabinet signs off, repayment for affected savers can begin. He added that the government intends to clear the dues of small depositors first so families with limited savings feel some relief.

The Finance Ministry will inject seed money into the revolving fund. That pool of money will be used to pay depositors of cooperatives officially listed as problematic. Whatever amount the state recovers by auctioning the assets of these cooperatives will be funneled back into the same fund to keep it running.

Groups representing victims have been holding campaigns across the country, demanding their deposits back. Nepal has close to 34,000 cooperatives, but they fall under different tiers of government, which has made oversight difficult. Many victims have also been calling for legal action against operators accused of wrongdoing.

Some cooperatives that stayed true to cooperative principles have been operating well and supporting their members. In contrast, those that ignored these principles, collected deposits recklessly, or issued loans without proper controls are the ones now facing serious financial trouble.