Nepal Bankers’ Association (NBA) organized an interaction program on “Credit Risks, Recovery Challenges & Legal Perspective”, bringing together representatives from the judiciary, law enforcement agencies, concerned government entities, the regulators, and officials from member banks to discuss legal and practical challenges in credit recovery, collateral enforcement, non-banking asset management, legal disputes and the professional accountability of banking officials.
The program commenced with the welcome remarks by Mr. Anil Sharma, Chief Executive Officer, NBA, who highlighted the growing challenges faced by banks in loan recovery, including the hurdles faced at local government and land administration offices. He also highlighted the need for greater legal clarity, effective coordination amongst relevant institutions, and a predictable environment that supports responsible banking and effective loan recovery.
The technical sessions featured three presentations. The first presentation was delivered by Advocate Mr. Ganesh Thapa and Senior Advocate Mr. Bishnu Baskota on behalf of the NBA Legal Committee where the key legal, regulatory and operational challenges faced by banks in loan recovery, collateral enforcement and the management of non-banking assets was highlighted. The second presentation was delivered by Mr. Rishi Ram Kandel, SSP, Central Investigation Bureau, focusing on practical legal challenges arising from banking-related cases and their implications for financial institutions and banking professionals.
The third presentation was delivered by Hon. Anil Kumar Sinha, Former Justice of the Supreme Court of Nepal, providing judicial perspective on banking disputes, loan recovery, collateral enforcement, and compliance with applicable legal procedures. He also discussed upon the challenges associated with litigation, delays in dispute resolution and legal uncertainties affecting the effective enforcement of banks’ rights.
The final session featured a high-level panel discussion chaired by Hon. Bal Krishna Dhakal, Justice of the Supreme Court of Nepal.
The panel comprised Mr. Khemraj Gyawali, Deputy Attorney General, Office of the Attorney General; Mr. Uma Prasad Chaturbedi, AIGP, Central Investigation Bureau; Mr. Naresh Raj Aryal, Banking Member, Debt Recovery Tribunal; Mr. Shubhash Chandra Ghimire, Director, Bank Supervision Department, Nepal Rastra Bank; and Mr. Surendra Raj Regmi, Vice – President, Nepal Bankers’ Association; which was moderated by Advocate Mr. Bidya Kanta Adhikari. The panel discussion focused on various legal, regulatory, investigative and operational dimensions related to credit recovery and legal matters.
Concluding the panel session, Hon. Dhakal highlighted the importance of continued coordination and dialogue among all concerned institutions to address the challenges in the banking sector. He emphasized that sustained engagement among the judiciary, government agencies, regulators, law enforcement authorities, and the banking sector is essential to develop practical and effective solutions. He further emphasized the need to rethink the relevance of Banking Offence and Punishment Act which was introduced in 2064 BS during a different context – and considering the significant evolution of the banking sector and the broader financial system, perhaps its time to review whether those legal provisions remain relevant and appropriate.
The program concluded with an active engagement from the participants. The presence of senior officials from various concerned agencies to discuss upon a common agenda was valued by all the participants.