Bafia Amended : Strict to big shareholders of banks and financial institutions of Nepal

By amending the Bank and Financial Institutions Act (Bafia), the government has indicated that it will be stricter on the major shareholders of banks and financial institutions. The government has registered a bill to amend the Bank and Financial Institutions Act 2073 in the House of Representatives and has moved forward with preparations to impose more strictures on the major shareholders of banks.

In the bill registered by Finance Minister BarsMan Pun in the House of Representatives, it is mentioned that the role of shareholders who own more than 1 percent of shares will be regulated further, while the shareholders who own more than 1 percent of shares are prohibited from taking loans from the same financial institution.

"A person or an organization, alone or jointly with other individuals or organizations, has taken 1 percent or more shares of the paid-up capital of a bank or financial institution, or is able to influence the bank or financial institution due to share ownership," on Bafia.

The shareholders of the bank have looked at this matter in a special way. This arrangement conveys the message that single households, groups and individuals cannot own a large share of shares in banks and financial institutions.

According to the bill, a person who has invested more than 1 percent of shares in any bank or financial institution will not be allowed to take a loan from that bank. According to the current system, if he owns more than 2 percent of shares in any bank, he cannot take a loan from the same bank. Now the two percent limit has been reduced to one percent. It also seems to have tightened the big shareholders.

With this arrangement, the National Bank wants to separate industrialists and bankers. If the bill is passed as it is, those who invest in banks and those who take loans from banks and invest in other businesses will be separated to a certain extent. It is mentioned that 30 clauses will be amended in Bafia through the proposed bill. In the bill, the subject of digital bank to digital currency has also been disclosed.