Make promoters responsible
KATHMANDU, June 6:
Sensing the trend of promoters being irresponsible, parliamentarians today sought the way to make them responsible even after they leave the financial institutions.
“The proposed amendment in Banks and Financial Institutions Act (Bafia) should have a clear provision that a promoter should not be allowed to leave the financial institution without clearing liabilities,” said committee member and Constituent Assembly member Hari Roka during the discussion at Parliamentary Statutory Committee here today.
In the past there has been a couple of incidents, when a promoter has walked out without clearing liabilities.
“Compulsory consent of the banks and financial institutions should be introduced, if promoters want to transfer their responsibilities to other promoters,” he proposed, adding that personal guarantee should be fixed according to the banks and financial institutions rule. He presented the instances of Cosmic Air and Necon Air. “Promoters of both the airlines fled due to unclear provision in the existing Act,” he said, criticising the trend of making low level staff and member responsible.
“State should come hard against defaulters,” he said.
However, other members of the committee including entrepreneur Diwakar Golchha and Ramesh Lekhak said that such provision should not be introduced in the Bafia.
“The purposed amendment is more concerned with Company Act,” Golchha said. Parliamentarians also porposed to include base rate and split rate in the proposed amendment.
The committee members demanded to fix base rate of the interest. Base rate is the rate of interest used by individual commercial banks as a basis for their lending rates. Currently, Nepal has fixed the interest rate through Monetary Policy. However, central bank governor Dr Yubraj Khatiwada pledged to address the rate issues through Monetary Policy.
However, committee members said that the interest rate could be revised only twice a year.
“If interest rate increases in short term, the cost of fund will increase and investors will be discouraged,” other committee members said.
Source: THT
Sensing the trend of promoters being irresponsible, parliamentarians today sought the way to make them responsible even after they leave the financial institutions.
“The proposed amendment in Banks and Financial Institutions Act (Bafia) should have a clear provision that a promoter should not be allowed to leave the financial institution without clearing liabilities,” said committee member and Constituent Assembly member Hari Roka during the discussion at Parliamentary Statutory Committee here today.
In the past there has been a couple of incidents, when a promoter has walked out without clearing liabilities.
“Compulsory consent of the banks and financial institutions should be introduced, if promoters want to transfer their responsibilities to other promoters,” he proposed, adding that personal guarantee should be fixed according to the banks and financial institutions rule. He presented the instances of Cosmic Air and Necon Air. “Promoters of both the airlines fled due to unclear provision in the existing Act,” he said, criticising the trend of making low level staff and member responsible.
“State should come hard against defaulters,” he said.
However, other members of the committee including entrepreneur Diwakar Golchha and Ramesh Lekhak said that such provision should not be introduced in the Bafia.
“The purposed amendment is more concerned with Company Act,” Golchha said. Parliamentarians also porposed to include base rate and split rate in the proposed amendment.
The committee members demanded to fix base rate of the interest. Base rate is the rate of interest used by individual commercial banks as a basis for their lending rates. Currently, Nepal has fixed the interest rate through Monetary Policy. However, central bank governor Dr Yubraj Khatiwada pledged to address the rate issues through Monetary Policy.
However, committee members said that the interest rate could be revised only twice a year.
“If interest rate increases in short term, the cost of fund will increase and investors will be discouraged,” other committee members said.
Source: THT
