Cooperatives Cannot Charge More Than 13 Percent Interest, Nor Demand Extra Money as Service Fees
The Department of Cooperatives has reduced the reference interest rate for cooperatives from 16 percent to 13 percent, effective from Ashwin 1. Additionally, the department has prohibited charging extra amounts under any heading, including penalties, administrative fees, and service fees, while warning of action for non-compliance.
Kathmandu — The Department of Cooperatives has set the maximum interest rate that cooperative institutions can charge at 13 percent. Previously, the reference interest rate for cooperatives was 16 percent, but the department has reduced it by 3 percent to 13 percent. This new rate will come into effect from Ashwin 1.
Now, cooperatives must analyze their transaction status and needs and set interest rates below 13 percent.
Similarly, if a cooperative decides to charge a penalty, it cannot charge more than 5 percent penalty on the outstanding interest amount.
Furthermore, the department has made it clear that cooperatives cannot charge borrowers any additional amounts under any headings such as administrative fees, service fees, renewal fees, and form charges.
The department has instructed cooperatives to comply with these provisions and has also warned of action if they fail to do so.