Section 50: Transaction of Savings and Credits to be made concentrating on Member

1) A Cooperative Organization may accept savings only from its members, to mobilise such savings and disperse credits only to the members.

2) Notwithstanding anything contained in sub-Section (1), no sectoral or multi-purpose Organization other than the Organization Registered with the main objective of making savings and credit transactions shall be allowed to make savings and credit transactions as the main transaction.

Provided that in case any sectoral or multi-purpose Organization has been carrying out the main objective of making transactions of savings and credit at the commencement of this Act, such an organisation shall, within a period of three years, make provisions of not carrying out the transaction of savings and credits as the main transaction and to have the main transaction of the matter which was stated at the time of registration of the Organization.

3) Except otherwise specified by the Registrar, service charges and renewal fees on credits disbursed by Cooperative Organization to members shall be as stated in the procedures of the concerned Organization.

4) The difference in the rate of interest on savings and on credits (spread) shall not be more than six percent.

5) The interest to be charged on credit disbursed by a Cooperative Organization shall not be charged having capitalised the interest in the main credit amount.

¹6) Cooperatives shall not use the savings of their members for any purpose other than for loan investment among themselves, purchase of bonds issued by the Government of Nepal or shares of cooperative banks or small farmers’ microfinance institutions, purchase of real estate, construction of infrastructure, investment in transactions, purchase of shares of firms, companies or any other banks or for any other purpose.

7) A Cooperative Organization may collect deposits as much as fifteen times the primary capital.

8) An Organisation or Association may not make credit investments to members other than the members who are listed at the time of registration until a period of three months is completed after acquiring the membership.

^{1 Amended by the Act to Amend Certain Nepal Acts, 2075.}