March 29: Finance Minister Janardan Sharma on Monday sought the opinion of bankers regarding an individual or a group operating both business enterprise as well as bank at a time.

The minister made such query during a discussion with the representatives of banks and financial institutions (BFIs) and the insurance companies at the Ministry of Finance on Monday (March 28). The ministry had organized the discussion to seek the feedback from private sector stakeholders regarding the government’s upcoming policies and programmes as well as the budget for the upcoming fiscal year.

On the occasion, Minister Sharma asked whether it was beneficial for the economy for the same individual to be a banker and also a businessperson.    
"It seems that the same individual or group is involved in banking sector and business. Is this a good practice? If yes, then I have no objections. But please provide me some suggestions if some amendments are needed in this regard," the finance minister said.

Minister Sharma said that the government had already held similar discussions with stakeholders from the agriculture and education sectors and were now holding discussions with representatives of BFIs and insurance companies.

Minister Sharma also shared his idea of establishing a microfinance fund to provide concessional loan to the general people.    

“We are contemplating about setting up a microfinance fund but not to charge high interest. Instead, the fund will be utilized with the concept of providing concessional loans to the general public through microfinance companies,” added the minister.

During the discussion, former vice chair of the National Planning Commission Min Bahadur Shrestha pointed out to the need of attracting foreign direct investment. He opined that the government has invested heavily on insurance for the agriculture sector but the results were not satisfactory. He suggested the government to improve the economy by cracking down hyperfund, cryptocurrency and by controlling the interest skyrocketing interest rates.

Former vice chair of the NPC Dipendra Bahadur Chhetri said that the loan allocated for the agricultural sector was been distributed for the import of industrial and agricultural products and the genuine farmers were deprived from such facility.

He also said that he heard rumors of demonetization for curbing the liquidity crisis. He warned that the notes of Rs 500 denomination accounted for 21 percent of the total money circulating in the market and Rs 1000 denomination notes comprised of 70 percent and said it would be a great challenge for the government to demonetize the currency.

Speaking on the occasion, former chairman of Nepal Bankers’ Association Anil Shah said that the government needs to make new arrangements for renewal of labour permit in order to increase the inflow of remittance by facilitating the Nepali migrant workers aspiring to work overseas.

“The government can find out the estimated earnings of the workers. Therefore, it can keep a record of the money sent back  to Nepal and easily find out if it has been sent through official channels or through the illegal hundi system,” said Shah.

Others attending the discussion suggested the government to resume bancassurance service, setting up of an insurance fund, easy access to banking services in all seven provinces among others.