BAFIA amendment will have serious impact on Nepal’s economic activities: FNCCI president

KATHMANDU: Federation of Nepalese Chambers of Commerce and Industry (FNCCI) President Chandra Prasad Dhakal has warned that the proposed amendment to the Banks and Financial Institutions Act (BAFIA) will have a serious impact on Nepal’s economic activities.

Speaking at a programme on the country’s financial and monetary situation organised by the Nepali Congress’s Department of Financial Institution Coordination at the NC central office in Sanepa, Lalitpur, Dhakal said that if the amendment is passed in its current form, it will undermine business operations and industrial activity.

He urged policymakers to take the issue seriously, particularly the bill’s proposal to separate bankers from industrialists. “The issue of separating businesspeople and bankers could create problems for the economy. On one hand, it is stated that promoters will be made accountable by allocating them 51% of shares as founders. In addition, related parties have been defined. If investors holding more than 1% of shares are not allowed to take loans under this provision, there is a risk that almost all industries and businesses will be forced to close,” Dhakal said.

He argued that economic development is impossible without a thriving private sector, and highlighted FNCCI’s own recommendations: the formation of a high-level economic commission, the amendment of 30 laws based on its suggestions, and the prioritisation of the private sector in the national budget.

“We have consistently advocated for policy reforms and an investment-friendly environment to ensure the country’s economic prosperity. The policy reform efforts initiated by the current government—which includes the Nepali Congress, a key component of the ruling coalition—are welcomed. The budget for fiscal year 2025/26 considers the private sector as the driver of the economy and has pledged to prioritise economic reforms. FNCCI is optimistic and encouraged by these developments,” he added.

Dhakal mentioned that Nepal possesses abundant opportunities and called for a shift from pessimism to optimism. “At present, the government has undertaken numerous policy reforms; we have received the highest remittance in history; foreign exchange reserves are strong; bank interest rates have declined. In these conditions, an environment for investment exists. All these developments should be viewed positively,” he remarked.

He also stressed the importance of mobilising both domestic and foreign capital for national development. Under FNCCI’s leadership, Nepal Public Limited Company was established with a capital of Rs 10 billion to channel internal funds into various sectors.