IPB mulls lifting ban on co-op investments

THE government has commenced research reviewing the current restrictions on cooperatives investing in industries. So far, no industrial act in the country permits cooperatives to set up industries, while the Cooperative Act 1992 bans cooperatives from being involved in any profit making sector. The 206th meeting of the Industrial Promotion Board (IPB), held on Friday in the chairmanship of the Industry Minister, Shankar Prashad Koirala, has decided to take inputs from the Ministry of Law, the Finance Ministry and the Nepal Rastra Bank (NRB) whether to allow cooperatives to invest in any industrial firms. “Following several queries and interests shown by cooperatives, the meeting decided to begin thorough preparations to make a policy level decision that will state clearly if cooperatives be allowed to set up factories or not,” said Dhruba Rajbanshi, member secretary of IPB. He said a committee formed under his coordination will begin the process of taking feedback from the mentioned agencies, with comments given further consideration at the next IPB meeting. So far, investors can register their industries (with more than Rs 30 million capital) under three acts, including: the Private Firm Registration Act - 1958, the Partnership Act- 1964 and the Company Act - 2006. “Industrial firms proposed by cooperatives cannot be registered under any provisions mentioned in these acts,” said Rajbanshi, who is also director general at the Department of Industry (DoI), adding, “The existing Industrial Enterprises Act has also mentioned nothing to this regard, which is why it requires a policy level decision in regards to cooperatives’ investment in industries.” The Ministry of Industry (MoI) said the debate in regards to potential cooperatives’ investment in industries began seven months ago after the Sugarcane Cooperatives applied for setting up a sugar factory at the ministry. “Subsequently, a committee formed under the leadership of Rajbanshi recommended that the cooperative can set up the industry,” said an official at the ministry.