Proposed amendments to BAFIA could severely impact economic activities: Dhakal

KATHMANDU: Federation of Nepalese Chambers of Commerce and Industry (FNCCI) President Chandra Prasad Dhakal has warned that proposed amendments to the Banks and Financial Institutions Act (BAFIA) could severely impact Nepal’s economic activities.

Speaking at a program organized by the Financial Institutions Coordination Department of the Nepali Congress (NC) in Kathmandu on Tuesday, Dhakal said that if the amendments are passed as proposed, they would have a serious negative effect on the economy.

Dhakal specifically highlighted concerns about the proposed provision to separate bankers and industrialists. “The proposal to separate businesspeople and bankers could create significant problems for the economy,” he said. “While there is a proposal to make promoters accountable by allocating 51% of shares to them, the definition of “related parties” is problematic. If investors holding more than 1% of shares cannot obtain loans, then almost all industries face the risk of shutting down.”

Dhakal acknowledged the policy reforms initiated by the current government, including the formation of a High-level Economic Reforms Advisory Commission, the proposed amendment of 30 laws based on the commission’s suggestions, and the priority given to the private sector in the budget.

“The government has made many policy reforms. The foreign currency reserves are strong, and bank interest rates have decreased. This situation creates an environment conducive to investment,” said.