Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Ministry of Finance is still deliberating on whether to immediately implement or provide a transitional period for the legal separation of bankers and businesspersons, said Revenue Secretary Dinesh Kumar Ghimire during a recent meeting of the House of Representatives Finance Committee.
The discussion centers around the Bank and Financial Institution Act (BAFIA) Amendment Bill, where the government has proposed separating individuals engaged in banking from those running businesses. However, the bill does not specify any timeline for implementing this separation.
Responding to committee members who suggested allowing time for banks and financial institutions to adapt, Secretary Ghimire stated that the ministry has not yet reached a final decision.
“The Ministry of Finance is still discussing whether the separation between bankers and businesspersons should be made immediately or after providing a grace period,” Ghimire said. “We must assess the potential impact on the capital market and resolve practical challenges before reaching a conclusion. The government is moving forward in that direction.”
Stakeholders Await Clarity Amid Regulatory Ambiguity
The issue of dual roles—where individuals serve both as promoters of banks and business firms—has long raised concerns over conflict of interest and corporate governance loopholes. The amendment aims to tighten such regulatory gaps, but the lack of a clearly defined implementation period has triggered uncertainty in the financial sector.
Committee members urged the government to provide a reasonable time frame for affected stakeholders to restructure their holdings and responsibilities.
Potential Implications for Nepal’s Capital Market
Experts warn that a sudden enforcement without a transition period could create market disruptions, especially in bank shareholding patterns, investment confidence, and ownership structures of both banks and private firms.
The Ministry’s decision is expected to set a precedent for corporate governance reform in Nepal’s banking and financial sector, which has seen increasing scrutiny from regulators and lawmakers alike.
As the debate continues, stakeholders from both banking and business communities are awaiting a clear directive on how and when the separation will be enforced.
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