A rift has emerged between parliamentarians and experts over whether individuals should be allowed to hold the dual role as both industrialists and bankers.

During Sunday’s meeting of the Finance Committee under the House of Representatives at Singha Durbar, which discussed the proposed amendment to the Bank and Financial Institution Act, 2016, several MPs argued that industrialists and bankers should not hold overlapping roles.

MP Dr Swarnim Wagle, Deputy Chair of the Rastriya Swatantra Party, stated that it is essential to clearly separate the two functions. “There should be no situation that creates a conflict of interest,” he said. “There is much debate today about the involvement of businesspeople in banking, but this is not practically viable,” he added. According to him, some groups are questioning the practice, while he argues that there is an inherent conflict of interest.

“Currently, intermediaries are in control — political parties dominate economic institutions and monopolies are forming. We must dismantle this structure. Therefore, my firm opinion is that clear boundaries must be drawn between industrialists and bankers based on principle,” said Dr Wagle.

Former Finance Minister Gyanendra Bahadur Karki remarked that there is a need for policy reforms to enhance the regulatory and management systems of banks and financial institutions.

Former banker Pashuram Kunwar Chhetri cautioned that introducing a policy that denies loans merely on the basis of someone having investments in banks and financial institutions could pose serious risks. “Those who invest in banks often have other business ventures. If we deny them credit just because of their investment, what would be the wider impact? This must be carefully studied before the committee reaches a decision,” he said.

He argued that investing in banks and financial institutions should not disqualify an industrialist from accessing credit. “Just because someone has money and invests in banks, it doesn’t mean they should be denied a loan. If a businessman is barred from obtaining credit on this basis, the consequences could be significant.”

The former minister also pointed out that there are growing concerns over the unclear role of Nepal Rastra Bank, the regulatory authority for banks and financial institutions. He emphasised the need for expert advice to enhance the effectiveness of the central bank's role.

He called for policy reforms to ensure Nepal Rastra Bank has clear supervisory authority, and to establish a legal framework for digital banking. He also suggested that the Finance Committee would benefit from expert input to facilitate smoother discussions.

Similarly, Karki highlighted the need for stronger cyber security policies and effective emergency recovery frameworks. He also underscored the importance of meaningful customer protection and a well-structured penalty mechanism, expressing hopes for substantial input from financial experts.

He further stressed that discussions should take international practices into account, and that serious debate is essential to build a resilient and accountable financial system.