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.