A test case
At a time when multilateral donors are insisting on taking firm action against wilful loan defaulters, who together owe billions of rupees to two state-owned banks, it has surfaced that Dr. Tulsi Giri, the second-in-command in the present Council of Ministers, stands a blacklisted debtor with the Credit Information Bureau. He was the chairman of the board of directors of Himalaya Plastics Pvt Ltd., which owes NBL a sum Rs.17.4 million on loans taken on Dr Giri’s guarantee about two decades ago. Besides, it has also listed his wife Sahara Giri’s firm General Electronics, which has to repay loans amounting to Rs.4.12 million to NBL, from which she, as a major stakeholder, had borrowed more than 20 years ago. Loan recovery continues to dominate the government’s financial reform programme, but the World Bank has cited poor performance on this front as a major reason for its recent suspension of Rs.five billion in aid. However, on donors’ pressure, the government seems, of late, to be doing something about it. For example, a committee headed by Dr Shankar Sharma, vice chairman of the National Planning Commission, submitted a report in April, recommending tough action against wilful defaulters, including barring blacklisted persons from assuming any public post. Other measures reported to be under consideration include denial of passport and boycotting them at public functions.
The Giri episode has given a new twist to the whole affair. Indeed, he should get justice, and justice should be applied equally to all citizens. But Dr Giri has ruled out the idea of his resigning on moral grounds, saying that he was not aware of being blacklisted and that the bank has not written to him about the dues. This is not a strong defence. Besides, he has not rejected the news stories as fabricated. It will not do credit to the bank’s foreign management, either, to limit its enquiry to finding out how the information leaked out; it owes it to its hundreds of thousands of depositors, as well as to the general public, not to hide the truth. While a controversial royal commission on corruption has been formed parallel, with more powers, to the constitutionally formed anti-graft organ, the Giri loan case provides a test case for the royal government.