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Business community condemned for flaying black list directives
KATHMANDU, DEC 01 - Bankers today condemned the business community for making hue and cry over the central bank’s new Directives on Black Listing the defaulters. They said that the resistance to the directives came simply because it aims to bring people ‘out of control’ on track.
"If borrowers have genuine reasons for not repaying loans, banks are always ready to negotiate and pledge additional time. But, if they are wilful defaulters, they have no rights to voice against the directives," they said. They were speaking at a programme on "New Financial Reform Policies and Its Impact on Corporate Houses" organised by Management Association of Nepal (MAN).
"There is no trend of loans repayment among people of influence and power in Nepal," J Craig McAllister, said Chief Executive of Nepal Bank Limited (NBL). "But, we will make sure that the bank gets back all its loans," he added.
He noted that the NBL management would not act precipitously while recovering loans and would provide every opportunity to all borrowers to negotiate on the matter.
"We will approach each and every borrower and hold an honest and straight forward dialogue. If they opted to discuss their problems, rather than going to the court or resorting to unfair means, we will help them and allow loans restructuring," he said.
Stating that lax categorisation of loans had prevented exposure of real situation of banks in the past, McAllister added that the conditions of loans were bad. "But, situation is improving," he said. The NBL management targets to achieve a net profitability by the end of this fiscal year.
Bruce F Henderson, CEO of Rastriya Banijya Bank (RBB), relating the Indian experience, said that the latest initiatives of the central bank that empowers bankers to go after defaulters would deliver positive results in the banking system without having negative impact in the market and corporate businesses.
Referring to the bank’s revival initiatives, he said that the new management has laid focus on quality of lending, strengthening the micro-enterprise credit, extending education and housing loans and expanding services to the international trade.
He added that the management targets to bring down the employees to 3,200 from 4,259 existing staff. "For this, the bank might announce another round of Voluntary Retirement Scheme (VRS) soon," he said. During the first round of VRS announcement, the bank had received applications from over 1,200 employees.
Referring to a response of publication of defaulters name in newspapers, he said that more people have approached the bank to pay back their loans to prevent the publication of their names in papers.
Sashin Joshi, Executive Director of the NIC Bank, meanwhile, said that the programmes to revive sick industries should be introduced only if there is a reasonable chance of revival of these units.
He, however, criticised the government’s financial approach to sick industry revival citing it neglects the management, technology, and other aspects of industrial operation. He also lambasted entrepreneurs for remaining silent on what they would do revive their units.
In the same tone, Rajendra Khetan, President of Nepal Britain Chambers of Commerce and Industry (NBCCI), criticised the corporate houses of playing with money of naive depositors. Nonetheless, he asked the government to formulate laws allowing smooth exit to promoters who intend to shut down their business.
Meanwhile, Chandi Raj Dhakal, First Vice President of Federation of Nepalese Chamber of Commerce and Industry (FNCCI), asked the central bank and the government to review the Directives on Black Listing. "The directives contradicts with constitution of the Kingdom and posses a lot of practical problems," he said.
Rajan Singh Bhandari, Vice President of the MAN, Gajananda Agrawal, a businessman and professor Dr S L Amatya too had shared their views on the occasion.Posted on: 2003-11-30 11:19
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