Nepal's cooperative crisis
How savings and credit cooperatives grew, failed their depositors and drew in a party leader, a media owner wanted on arrest warrants, and a new regulator.
Nepal enacted a new Cooperative Act after the restoration of democracy. The government stopped directly promoting cooperatives and the sector began to grow on its own.
The Himalayan TimesA government probe commission found that 22,170 depositors had yet to receive about Rs 7.6 billion from cooperatives, or more than Rs 10 billion including interest. Its recommendations on monitoring and legal controls were largely not implemented.
Nepali TimesParliament passed a new Cooperative Act that barred cooperatives from investing in fixed property, private businesses and company shares, and limited where they could operate. It drew on a probe into 130 troubled cooperatives.
The Kathmandu PostA government committee began gathering information on the assets of Oriental Cooperative, the first cooperative the ministry declared problematic. Oriental is accused of misusing Rs 4.2 billion in deposits from 11,840 customers.
The Himalayan TimesNepal had about 32,000 cooperatives holding some Rs 700 billion in deposits. Complaints against cooperatives were rising, and thousands had been sent to police for investigation.
Nepali TimesKaski District Court issued arrest warrants against promoters of the Pokhara-based Suryadarshan Savings and Credit Cooperative, including Gitendra Babu (GB) Rai, chair of Gorkha Media Network, which ran Galaxy 4K Television.
The Kathmandu PostAfter repeated obstruction of the House, the House of Representatives formed a seven-member special committee, chaired by CPN-UML lawmaker Surya Thapa, to investigate the misuse of cooperative funds.
The Kathmandu PostThe committee submitted its report to the House. It found that about Rs 650 million (roughly $4.2 million) from five cooperatives had been diverted to Gorkha Media Network, and recommended action against Rabi Lamichhane, GB Rai, Kumar Ramtel and Chhabi Lal Joshi.
Himal PressPolice from the Central Investigation Bureau arrested Rastriya Swatantra Party chair and former home minister Rabi Lamichhane at his party office in Kathmandu on charges of organised crime and misappropriation of cooperative funds. He has denied the charges.
Himal PressGovernment attorneys filed charges of cooperative fraud, organised crime and money laundering against Lamichhane and others at Kaski District Court in the Suryadarshan case.
Himal PressPresident Ramchandra Paudel issued an ordinance creating a National Cooperative Regulatory Authority, abolishing the National Cooperative Development Board and making repayment of depositor savings up to Rs 500,000 a priority.
Asia News Network (The Kathmandu Post)Kaski District Court released Lamichhane on Rs 6.5 million bail after 84 days in custody. He still faced cases in Kathmandu, Rupandehi, Chitwan and Parsa.
The Kathmandu PostThe Butwal bench of the Tulsipur High Court ordered Lamichhane held in pretrial custody in the Supreme cooperative case, and he was taken into custody at his home.
Himal PressThe Butwal bench of the Tulsipur High Court ordered Lamichhane released on bail in the Supreme cooperative case. He left prison the following day.
Himal PressThe Attorney General's Office approved withdrawing the organised crime and money laundering charges against Lamichhane in four district courts. The cooperative fraud charges remained.
The Kathmandu PostThe government began refunding small depositors of problematic cooperatives from a revolving fund, starting with about Rs 1.4 million paid to 378 people. About Rs 46 billion (roughly $300 million) was still owed to nearly 76,000 depositors.
The Kathmandu PostGB Rai, accused of embezzling more than Rs 21 billion (roughly $135 million) from depositors of about ten cooperatives, remained at large. Police have tracked him to Malaysia, but he has not been arrested.
Online Khabar EnglishThe House of Representatives passed the Cooperative (First Amendment) Bill, 2083, to replace an ordinance. The minister said a separate law had become necessary because Nepal is on the global money laundering grey list.
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How this timeline was made: compiled by The Standard’s desk with AI assistance from the sources linked under each event, and checked against them. Allegations are allegations; an arrest or charge is not a finding of guilt. Spotted an error? Write to [email protected].
Our reporting
GB Rai, Gorkha Media and the cooperative savings still caught up in court
A parliamentary committee said cooperative savings reached GB Rai's television company. He remains abroad, the heaviest charges were dropped in May 2026, and the cooperative fraud charges have not been tested in court.
How Nepal's savings cooperatives became shadow banks, and who is being paid back
Cooperatives took deposits like banks but were overseen like clubs; the 23 the federal government has declared troubled owe Rs 46bn to some 76,000 savers, and refunds that began in May cover a small fraction.