Passports of the defaulters to be seized and barred from transferring ownership or selling their fixed asset.
In
an attempt to recover more than 32 billion rupees defaulted bank loan,
the government has decided to seize the passports of all blacklisted
willful defaulters. The government has also decided to bar them from
transferring ownership of or selling their fixed assets.
The Rastra Bank had published the name of 53 willful defaulters this
August who had defaulted more than 25 billion rupees from two government
owned banks of the country Nepal Bank Limited and Rastriya Banijya
Bank. However, the number will rise to nearly six dozens when this
policy will be implemented initially for businessmen defaulting more
than Rs 50 million.
Now, many top businesspersons from big
business houses will be restricted from flying abroad or selling their
property. However, blacklisted defaulters will be allowed to sell their
fixed assets for the purpose of servicing their outstanding debts.
It
seems like that the government has decided to go tough against those
defaulters. It has also endorsed a seven-point plan of action to
pressurize defaulters to pay their loan liability. As per the plan of
action, those businessmen will be losing their credit and debit banking
cards. They will also be barred from assuming the position of director
or promoter of any company. They would not be allowed even to register a
new company. Likewise, treasury bills and savings certificates owned by
defaulters will be used only for repaying their loan liabilities.
Defaulters are also prohibited from receiving medals and decorations
provided by the state, and will not be awarded any public position.
Nepal
government was widely criticized for not taking action against those
willful defaulters. There were speculations that the government could
not initiate action as many ‘renowned’ industrialists including Chairman
of the Federation of Nepalese Chamber of Commerce and Industries Chandi
Raj Dhakal were also in the list. Dhakal’s Company Momento Apparels is
the Fifth largest defaulter. (See: Evils of the nation: Top Ten defaulters uncovered )
The
government has blacklisted 1,917 borrowers as willful defaulters whose
outstanding debt amounts to nearly 32.23 billion by the end of fiscal
year 2005/06.
However, there are doubts on the success of such
policies. In response to government decision to publish the name of 53
large willful defaulters, the business community had organized a day’s
nation wide protest on last September. In the scenario that such
attempts have failed in past, there are questions whether this
transitional government will not bow before those industrialists which
are the perennial source on income for the political parties.
This article originally appeared on Everest Uncensored Blog on October 31, 2006.
