No national treatment to foreign banks: Lawmakers

Kathmandu January 19- Lawmakers on Monday stressed that the government should not give national treatment to fully foreign-owned banks which have been allowed to operate in Nepal since 2010.

Commenting on the bill on the Bank and Financial Institution Bill (Bafia), many lawmakers said that foreign banks should be treated separately by categorizing the nature of the service they offer.The Bafia Bill allows foreign banks to engage only in wholesale banking to protect domestic banks from competition from international banks with massive capital and large business operations.

Speaking at a discussion on the Bafia Bill organized by the parliamentary Finance Committee, lawmaker Yagya Raj Sunuwar said it would not be appropriate to provide similar treatment to foreign banks.

Providing an example of the developed countries where banks are categorised as depository and non-depository, Sunuwar said non-depository banks can be provided a limited right to do business.

The Bafia Bill has attracted 52 amendment proposals from 22 lawmakers. They include barring bank chairmen from serving more than two terms, reducing the percentage of public shares set aside for bank staff and allowing banks and financial institutions (BFIs) to have only one traded union, among others.

Sunuwar criticized the Bafia Bill for disregarding issues related to mutual funds, pension funds, investment companies and micro credit institutions.