बाफिया संशोधनले सेयर बजारमा तरंग: बैंक तथा व्यवसायी छुट्याउने प्रावधानमा तीव्र बहसSeparation of Powers? BAFIA Draft Threatens Business-Banking Nexus

The proposed amendment to the Bank and Financial Institutions Act (BAFIA) has stirred significant debate and uncertainty in Nepal’s capital market. The key clause causing controversy is the provision to separate banks and businesspersons. If passed, anyone holding 1% or more shares in a bank will be prohibited from engaging in any business activity.

This move appears aimed at ensuring banks are free from influence by business tycoons and that conflicts of interest are minimized. However, the ripple effect on the stock market has already begun, with investors, analysts, and stakeholders expressing divided opinions across social media.

Public Reactions on Social Media:

• Shiva Chandra wrote, “The market is buzzing over the debate of separating banks and businessmen. If banks and businesspersons are to be split, does that mean banks themselves can’t do business? Confusing!”

• Rohan Karki argued, “This issue is being hyped without understanding the technicalities. Just because promoters are separated from the bank, doesn't mean they have to sell shares or exit entirely. Founders don't trade like ordinary shareholders. Market panic is unnecessary.”

• Raju Sharma Paudel highlighted that the bill includes 30 proposed amendments, including:

  • Separation of business and banking roles,

  • Defining new limits on bank ownership,

  • Regulating shares in financial sectors,

  • Enabling frameworks for digital currencies and tokens.

• Ajit Khanal explained that the core objective is to restrict business owners from influencing banks while still allowing healthy investments. However, he warns this could force major industrialists to withdraw from banks.

• Keshab Koirala described it as “BAFIA terror”, saying it will severely affect the secondary market as many promoters with more than 1% shareholding may be forced to exit.

A post from a page titled Share Market humorously summarized the panic: “BAFIA has scared the hell out of small investors. We don't understand anything, yet we're the ones losing money.”

The bill has not yet been tabled in parliament, but the draft is finalized. If enacted, it will:

• Clearly separate business from banking,

• Restrict influential shareholding,

• Introduce regulation of digital assets.

While the intention is to ensure clean governance and reduce risks, the short-term effect may be negative on Nepal’s capital market, with potential sell-offs and price drops in promoter-held shares.

The BAFIA amendment aims to improve transparency and discipline in Nepal’s financial system. However, rushed implementation without clear guidelines could shake investor confidence and destabilize the market. Lawmakers must approach the amendment with caution, balancing regulatory needs with market sentiment.