FNCCI President Warns Proposed BAFIA Amendments Would Hurt Economy

Chandra Prasad Dhakal, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), has warned that if the proposed amendments to the Bank and Financial Institution Act (BAFIA) are passed without changes, they will negatively impact all economic activities in the country.

Speaking at a program on Nepal’s financial and monetary situation organized by the Nepali Congress Financial Institution Coordination Department in Kathmandu on Tuesday, Dhakal said the proposed bill, in its current form, would have serious repercussions for the economy.

Dhakal expressed concern over provisions in the bill that seek to separate bankers and industrialists. “Such a move could create problems in the economy. On one hand, the provision requires promoters to hold 51 percent of shares to ensure accountability, while on the other, it defines ‘related parties’ in such a way that investors holding more than 1 percent of shares would be barred from obtaining loans. If enforced, this could force most industries and businesses to shut down,” he said.

He stressed that encouraging the private sector is essential for the country’s economic development. Dhakal noted that FNCCI had recommended the formation of a high-level economic commission, amending around 30 laws as per its suggestions, and prioritizing the private sector in the national budget. He added that these measures, reflected in the current fiscal policy, had boosted the morale of the private sector.

“We have long advocated for policy reforms and an investment-friendly environment to achieve economic prosperity. The efforts made by the current coalition government, which includes the Nepali Congress, are commendable. The budget for Fiscal Year 2025/26 recognizes the private sector as a key driver of the economy and commits to economic reforms. This has made us optimistic and encouraged,” Dhakal said.

Highlighting Nepal’s potential, he argued that economic prosperity could be achieved by harnessing these opportunities and adopting a positive outlook. “The government has implemented significant policy reforms. We have received record-high remittances, foreign currency reserves are strong, and interest rates have fallen. This is a favorable environment for investment, and we should take it positively,” he added.

Dhakal also emphasized the need to mobilize both domestic and foreign capital for the country’s development. He informed that under FNCCI’s leadership, a Nepal Public Limited Company with an initial capital of Rs 10 billion had been established to invest in various sectors with the aim of mobilizing domestic resources.

The headline has been updated for clarity.