Updated rules for Management of Cooperatives stressed

A TIB conducted study titled “Management of Cooperatives: Governance Challenges and Way Forward” stressed for updated rules for effective functioning of cooperatives and bring operational accountability. Mohammad Hossain and Nihar Ranjan Roy, Deputy Programme Managers, TIB presented the findings of the study at the press launched held on 15 April 2014 at the Hotel Abakash in Dhaka. Advocate Sultana Kamal, Chairperson, Board of Trustees; Dr Iftekharuzzaman, Executive Director; Dr Sumaiya Khair, Deputy Executive Director and Mohammad Rafiqul Hassan, Director, Research and Policy were also present during the release.

The study collected analysed information on 37 cooperatives operating in 6 divisions, 8 districts and 11 upazillas using four indicators – types of cooperative, level, monitoring institutions and geographical location. It identified a number of positive steps taken by the government including enactment of Cooperative Societies (amendment) Act 2013, mandatory monthly inspection, increased allowance for trainees, field investigation in case of registration, departmental actions against corrupted officials, formation of ad-hoc committees to protect interests of members of cooperative indicted for corruption.  

Despite these positives steps, ineffective implementation of these steps accompanied by various limitations resulted in lower performance of cooperatives. 

According to the report, various limitations in registration, monitoring and evaluation, audit, structural weakness of monitoring institutions, internal management limitations and corruptions hindered the cooperatives from achieving the desired results. Quoting a Bangladesh Institute of Development Studies (BIDS) study, the report said that 47% of the cooperatives are ineffective.

On the other hand media reported misappropriation of BDT 9700 crore by 21 different multipurpose, lending and savings cooperatives affecting 900000 members. The report revealed that unethical transactions ranging from BDT 8000-10000 take place during registration process. This goes higher depending on geographical coverage and ranges from BDT 35000-80000.

Commenting on the report, Sultana Kamal emphasisded on good governance and effective monitoring of cooperatives. She said “Cooperative Societies must be brought under effective monitoring so that these reflect people’s aspirations”.

The report revealed other irregularities including registration of cooperatives without proper field investigation, absence of joint audit,

preparation of financial statement in exchange of money, lending at a very high interest rate ranging from 30-45%, concealing actual profit during audit, formation of cooperatives for political purpose and whitening of black money through cooperatives.

To overcome these challenges and reduce incidences of corruption, the study recommended 22 measures of which updated rules for implementation of the amended act, developing a cooperative policy, proper allocation of resources, rescheduling of cooperative banks, proper inspection prior to registration and effective coordination among Department of Cooperatives and Bangladesh Rural Development Board are major.