Selling Someone Else’s Collateral Is ‘Part of Corruption’: Governor Paudel

Kathmandu — Nepal Rastra Bank Governor Prof. Dr. Bishwanath Paudel has issued a stern warning against irregularities related to collateral handling in the banking sector. He said that forcibly selling someone else’s collateral for personal gain constitutes “part of corruption”, adding that such actions will not be tolerated by the central bank.

Speaking at the 16th Annual General Meeting of the Nepal Forum of Financial Journalists (NAFIJ) on Sunday, Governor Paudel emphasized that there is a clear distinction in the way public and private banks are viewed. According to him, while government-owned banks may absorb certain risks, similar misconduct in private banks would invite strict regulatory action.

Governor Paudel highlighted that the central bank has recently revised several policies to stimulate economic activity. The first quarterly review of the monetary policy, he said, has been designed to support profitability and operational ease for financial institutions.

He added that the review has opened the way for consolidating and closing multiple bank branches inside metropolitan cities. The central bank is also encouraging banks to expand their digital services, with the goal of strengthening the overall momentum of the economy.

Paudel noted that Nepal Rastra Bank remains focused on ensuring that the large volume of deposits accumulated in banks is converted into productive investment. He explained that the movement of the economy is influenced heavily by public sentiment and psychology.

Referring to Nepal’s evolving economic landscape, he said significant progress has been made in sectors such as Himalayan Java, information technology, and infrastructure over the past decade. “The foundations are strong, but the morale is weak,” he remarked, urging stakeholders to focus on positive areas such as high-potential exports like cardamom.

The Governor expressed dissatisfaction with the prevailing mindset that “nothing will happen in Nepal,” which has led many parents and even senior officials to send their children abroad.

“For more than a decade, this country was portrayed as hopeless, leading to mass outmigration of our youth,” he said. “Now, we must bring them back—but not to make them ministers or push them into political competition. They should contribute in productive sectors.”

Governor Paudel shared that Nepal Rastra Bank is currently reviewing the blacklisting system applied to borrowers. He pointed out that the construction industry is facing a situation similar to microfinance, where a single borrower’s failure often leads to the entire group being penalized.

“There are too many blacklisted individuals in our system,” he said. “The mechanism needs reform, and the central bank is seriously examining it.”

According to Paudel, meaningful change cannot happen overnight. Improvements must be pursued gradually and systematically.

He added that failure should not be seen as a negative label. “Failure is not the enemy of business—it is simply part of the journey. What matters is giving priority to good stories and positive progress.”