Cooperatives swindle funds

AS per a study done by Transparency International Bangladesh (TIB), the government department overseeing cooperatives in the country is a den of corruption. Lack of oversight coupled with political patronage has opened up the Pandora's Box as far as getting easy registration goes, which seldom comes under scrutiny and is based mostly on speed money. With such a state of affairs, we are not surprised to find that cooperatives are involved heavily in micro credit, charging up to 45 per cent interest. Taking advantage of loose monitoring, cooperatives lure unsuspecting depositors with promises of higher than market standard rates of return.
Such lax monitoring allowed for high profile scams last year when the Destiny Multipurpose Cooperative case became public knowledge. While the management got rich, hard earned savings of its hundreds of thousands of subscribers went down the drain. That scam involving the swindling of over Tk.20 billion should have been an eye opener for the authorities.
What has been unearthed by the TIB study is that though the Cooperatives Act 2013 has undergone some revision in light of high profile scams in the sector; much more is needed to be done. There is the need for clear cut rules regarding cases of graft by cooperatives' management. Similarly, stronger oversight by way of monthly supervisory visits by department officials to minimise the chances of irregularities should be put in place. With more than Tk.90 billion swindled from investors over the last year, it is high time authorities did something about the endemic corruption plaguing the regulatory body and putting in checks and balances as to how a cooperative should function.