Chaudhary: No Buyers Even When Bank Shares Fall Below Par Value

Nepali Congress lawmaker and industrialist Binod Chaudhary has raised concerns that the draft amendment to the Bank and Financial Institution Act (BAFIA) fails to address the current challenges and opportunities of the financial sector and must be rewritten from a new perspective.

Speaking during a meeting of the Finance Committee of the House of Representatives, Chaudhary highlighted the declining investor confidence, saying, “Just yesterday, a friend told me he was willing to sell a bank share worth Rs. 100 for just Rs. 40 — and yet, couldn’t find a buyer. That shows the eroding trust in the banking and financial sector.”

He criticized the assumption that having businesspersons or investors on bank boards automatically creates a conflict of interest. “There are rules and procedures from the central bank to govern such matters. In fact, professional board members help protect investor interests,” he argued.

Chaudhary questioned whether the proposed BAFIA amendment prepares Nepali banks to compete regionally and internationally, especially in the era of digital banking. “Does this act allow Nepali banks to open branches in countries like Australia or Malaysia where a large Nepali diaspora resides?” he asked.

He also pointed out the mismatch between long-term infrastructure needs and the short-term, high-interest loans offered by institutions like the Infrastructure Development Bank (NIFRA). “Hydropower projects that take 10 years are being funded with short-term loans, which puts them at risk from day one,” he said.

Chaudhary emphasized that the upcoming monetary policy and BAFIA revision should work in harmony to support the national budget’s growth and investment targets. He called for an enabling environment that rewards efficient banks and strikes a balance between regulation and operational freedom.