close-icon

Business | Nepali banks failing their country

The Annapurna Express

The Annapurna Express

Business | Nepali banks failing their country

Nepal’s biggest commercial bank by paid-up capital, Global IME Bank, made a net profit of Rs 3.59 billion in the first nine months of the current. Yet the bank has done precious little to help the country combat Covid-19

“In nine months (of the current fiscal year) the 27 commercial banks of Nepal made a net profit of Rs 50.74 billion… Let these banks help establish isolation centers—1,000 bed each,” tweeted journalist Subina Shrestha on April 29. (The Nepali bits in this tweet and the tweets discussed below have been translated into English.)

The respondents to Shrestha’s tweet were mostly pessimistic. “I don't think they are rich enough for this type of greater good for larger public,” replied Roshan Regmi. “Is the banks’ social responsibility limited to making money?” asked Sita Mademba. “Seems you misunderstood it,” Ajay Das chimed in. “Nepali banks do nothing except make profits. The social responsibility of their operators is limited to establishing prizes in the names of their mothers and fathers.”

Indeed, even amid a raging pandemic, it was a bumper year for most Nepali commercial banks. Compared to the same period last fiscal, the 27 banks’ net profits increased by Rs 6.07 billion, a 13.5 percent increase.

Take the case of Nepal’s biggest commercial bank by paid-up capital, Global IME Bank. It made a net profit of Rs 3.59 billion in the first nine months of the current fiscal. Interestingly, even during the pandemic, the bank increased its net profit by a whopping 32.40 percent. Yet the bank has done precious little to help the country combat Covid-19. (Our repeated attempts to contact bank authorities for comments were unsuccessful.)

Global IME’s Chairperson Chandra Prakash Dhakal is a shadowy figure. In its 2019 report, the Center for Investigative Journalism, Nepal (CIJ Nepal) named Dhakal among 55 Nepali nationals with illegal properties abroad.  “Chandra Prasad Dhakal is found to have purchased the Sunbird Computer Consultants Limited on August 9, 2002,” says the report. “According to the documents received by the CIJ Nepal… he had rechristened the company as International Money Express (IME) UK Limited.”

Rather than invest in their country or help it overcome a crippling pandemic, top bankers like Dhakal are busy stashing their wealth abroad and cheating Nepali tax authorities.

This is not to single out the IME group and Dhakal. In the first nine months of the current fiscal, only one bank has made more profit than Global IME: Nabil Bank. Compared to its sheer heft, its contribution to the country’s anti-corona efforts has been puny. Incidentally, the same CIJ Nepal reports implicates the family behind the Chaudhary Group—who are also Nabil’s operators—in building wealth abroad.

“Every Nepali citizen and organization is constitutionally obliged to help the country in times of crisis as per their capacity. It’s also a moral duty,” says Uma Shankar Prasad, associate professor of economics at Tribhuvan University. Rather than our own organizations, he rues, outside agencies are doing more to help combat Covid-19 in Nepal. “There can be no question that the banks that have made so much money in this country should help it during a crisis like this.”

Even in India, adds Prasad, you have SBI as well as other commercial banks investing a lot in the betterment of their society. Nepali banks also spend on social causes but on a much smaller scale compared to their size.

“Why can’t Nepal’s profitable banks build isolation or quarantine centers? How about a subsidized hotel where the Covid-19 can be kept and treated?” Prasad asks.