NCC asks for barring BFIs from auctioning off borrowers' properties

KATHMANDU, DECEMBER 5: Kamlesh Agrawal, President of the Nepal Chamber of Commerce (NCC), has called on the government to intervene and stop the sale of borrowers' properties by banks and financial institutions (BFIs). Speaking at the fifth annual general meeting of the Confederation of Banks and Financial Institutions (CBFIN) on Friday (January 3), Agrawal highlighted the adverse impact of current practices on both lenders and borrowers.

“The BFIs are auctioning borrowers' properties at an alarming rate, yet they fail to secure fair value for these assets. Borrowers, too, are facing significant hardships,” Agrawal said. “To address this, the government should require that such properties be auctioned only through an asset management company.”

He further pointed out that banks have overexposed themselves to the real estate sector, and the current stagnation in property transactions has pushed several banks into blacklisting. “We must implement restrictions on investments in such areas to prevent further instability,” he added.

Similarly, Anjan Shakya, Senior Vice President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), emphasized the gap between bank liquidity and loan accessibility. “When businesses approach district banks for loans, they are often told that it’s a time for loan recovery, not issuance, citing directives from central offices. While banks have sufficient funds, investments are not happening,” Shakya noted.

Both leaders stressed the urgent need for comprehensive reforms in the banking and financial sector to ensure fair practices, support borrowers, and promote economic stability.