Single Cooperative Director Limit Enforced in Nepal: A Major Cooperative Rule Change

Cooperative Director Limit Nepal

9th December 2025, Kathmandu

The Department of Cooperatives (DoC) has issued a directive. This instruction enforces a strict provision. Cooperative Director Limit Nepal mandates that an individual can only serve as a director in one cooperative institution at a time.

Cooperative Director Limit Nepal

On Monday, the DoC issued a notice to all cooperative institutions nationwide. The directive calls for the immediate implementation of Section 41 of the Cooperative Act, 2074. This section clearly stipulates the restriction on holding multiple directorships.

The department has expressed frustration. Repeated previous instructions had reportedly been ignored. Consequently, the DoC has demanded the provision be implemented without delay.

Addressing Dual Directorship Complaints

The department’s directive comes in response to persistent grievances. Complaints have been received regarding individuals holding dual directorships. These people are currently working as directors in more than one institution simultaneously.

The DoC’s instruction clearly states: “Grievances have been received that some individuals are working as dual directors. Despite prior instructions, directors still holding such dual positions and all concerned cooperative institutions are hereby instructed to immediately implement the legal provision.”

This action is a critical step. It aims to enhance transparency and accountability. It ensures directors can dedicate their full attention to a single cooperative’s governance.

Ensuring Regulatory Compliance

The Department of Cooperatives did not stop with just instructing the cooperatives. It also issued a strong mandate to all regulatory bodies. These bodies oversee and monitor cooperative institutions.

Regulators have been directed to intensify their efforts. They must conduct regular monitoring, inspection, regulation, and supervision. The primary goal is to verify compliance. Regulators must confirm that the Cooperative Director Limit Nepal rule is being effectively implemented across all institutions.

This directive empowers regulatory bodies. It gives them the authority to take necessary actions. Their role is crucial in ensuring that this cooperative rule is not violated. Effective enforcement is key to maintaining the sector’s integrity.

Advertisement

Why the Implementation is Crucial

The enforcement of the single directorship rule is vital for several reasons:

Improved Governance: A director focused on one institution can provide better oversight and strategic direction. This improves the overall governance structure.

Reduced Conflicts of Interest: Holding directorships in multiple, potentially competing, cooperatives can create significant conflicts. The new rule minimizes this risk.

Increased Accountability: Single directorships make it easier to pinpoint responsibility. This enhances the accountability of the board members.

Wider Participation: Limiting individuals to one post opens up opportunities. More qualified individuals can now serve on other cooperative boards.

Next Steps for Cooperative Institutions

All cooperative institutions must now act swiftly. They need to identify directors currently holding dual roles. These directors must then resign from all but one position.

Failure to comply immediately could lead to penalties. The regulatory bodies will be actively inspecting for non-compliance. Cooperatives are urged to review their current board structures and membership lists.

They must ensure full adherence to the Cooperative Director Limit Nepal provision as per the government’s latest instruction.

For more: Cooperative Director Limit Nepal