<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171148/636937739c7e80680e03fe38jpeg.jpg" alt="" width="1050" height="642"/><figcaption>BHANU BHATTARAI</figcaption></figure>Slippery slope is what banks have been treading on last few weeks by engaging in a price war on deposits. One can understand the soup they are in. Higher interest rates do not bring in significant new deposits, yet they are compelled to raise the rates to retain what they have.They will also be nervous about upcoming outflow from the banking system towards mid January when first tranche of annual corporate income tax is due for payment. Depositors are happy for now but imagine the plight of businesses dependent on bank debt.How long will this credit crunch last? Is there light at the end of the tunnel? Obviously, there will be some relief once government starts releasing payments to vendors and suppliers of various goods, services and developmental works – these are normally bundled toward latter half of a financial year. But judging by how banks behaved last three years, there is no guarantee that the crunch will not resurface next October.Read also:<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/opinion/banks-biting-off-more-than-they-can-chew/" target="_blank" rel="noopener">Banks biting off more than they can chew?</a>, Suman Joshi<a href="https://www.nepalitimes.com/here-now/why-does-the-credit-crisis-keep-repeating-itself/" target="_blank" rel="noopener">Why does the credit crisis keep repeating itself?</a>Band aid solutions will not work anymore. A strong medication must now be administered. It will be painful but, in many ways, <a href="https://www.nepalitimes.com/opinion/banks-biting-off-more-than-they-can-chew/">banks brought it upon themselves</a>. There are fundamental issues with our economy and banking sector that have direct relationships with monetary equilibrium.Here are examples of initiatives banks may consider without any support or concessions from the government or the central bank:Ration credit. Banks resorted to aggressive credit expansion following mandatory increase in paid up capital and in anticipation of rapid economic growth post installation of a stable government. But their reading of monetary environment proved wrong time and again. Deposit mobilisation has not kept pace nor aligned with growth in loan books. The only way forward is to direct credit flow only into areas that will help productivity, until such times that deposit-loan growth mismatch is corrected. In any case, our financial system is banking-heavy and alternative investment options like private equity and venture capital are emerging.Read also:<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://archive.nepalitimes.com/regular-columns/guest-editorial/banking-crisis-explained,1096" target="_blank" rel="noopener">Banking crisis explained</a>, Suman Joshi<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/here-now/crunching-the-numbers-on-credit/" target="_blank" rel="noopener">Crunching the number on credits</a>, Ramesh Kumar and Sikuma RaiExpansion of formal economy. There is no denying that the Nepali economy is growing, albeit driven mostly by private sector. Private wealth has multiplied in value and people are generally better off than they were. Whilst income disparity may have widened, there are reasons to believe that anticipated government spending on infrastructure and creation of enabling environment will help us continue to grow in the medium term. However, a significant part of the economy is in the shadows of formal transactions. Size of our informal economy is estimated at anything between 50 to 100% of the formal one. And we remain a predominantly cash economy. Regulations aimed at channeling financial transactions through banking institutions must be put to use effectively. Banks, on occasions, have resisted implementing regulatory guidelines on cash transactions for fear of losing deposits. We must expand the formal economy to have more money staying within the banking system. Banks can play a catalytic role in encouraging businesses to avoid cash payments.E-payments. <a href="https://www.nepalitimes.com/banner/nepals-budding-e-commerce-ecosystem/" target="_blank" rel="noopener">Digital banking</a> is also an important tool to help expand formal economy. Banks need to take their ongoing initiatives on digital channels to the next level through deeper collaboration with small businesses. For example, it should be possible for a bank (or a number of banks together) to pilot a No Cash Zone in say Durbar Marg area, or the restaurant district of Jhamel, by getting all shops or restaurants to sign up to a campaign to accept digital or card payments only. These are locations frequented by more affluent customers. It can gradually be replicated elsewhere. Obviously, if people can pay for basic purchases like milk and vegetables conveniently through a credit card or a digital wallet, they will carry less cash. That money will stay as bank deposits until spent.Cooling period. A casualty of rapid business expansion has been quality human resource within the banking industry. Growth in banks’ business and branch network create new positions which are often filled by people with lesser skills and experience. Many young bankers hop-scotch their way up through a number of banks and assume positions of responsibility without necessary skills and experience. Add to that generally aggressive lending behavior with excessive reliance on real estate collateral. Frankly, potential for sub-standard loan assets and operational risk in many Nepali banks is cringe-worthy. The IMF has already expressed their concern over quality and sustainability of unnatural growth achieved by the sector in recent years. Just like a cooling period has been made mandatory for CEOs, a mechanism must be put in place to arrest the tendency among employees at supervisory and managerial levels to move to another bank at short intervals for quick gains. Why would a bank invest on training and grooming an employee if only for another bank to offer him a higher position? Many organizations in the western world have stringent non-compete clauses in employment contracts.Writer’s note: I have been a career banker and spent 24 years in the industry. Some may think I’m critical of banks because I’ve retired from banking profession. But I’ve had a fulfilling banking career and I feel deeply indebted to Nepali banking sector for making me who I am. I strongly believe that this sector needs to be understood in correct perspective. Raising contemporary banking issues is my way of giving back to the industry. Also, it sometimes is not feasible for practicing bankers to voice their concerns. All said and done, banking remains the most transparent sector of the economy; its contributions to economic growth have been unmatched. I will continue to share my dui paisa to help regain its stature as a well-respected sector.Suman Joshi is an ex-banker and Chair of True North Associates, a private equity firm.

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Banking on a course correction

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171144/636936869c7e80680e03fde6jpeg.jpg" alt="" width="1500" height="976"/><figcaption>Photo: YUVARAJ SHRESTHA</figcaption></figure>At a ministerial review meeting last month, Prime Minister K P Oli warned bureaucrats he would not take “If’s and but’s” anymore in expediting infrastructure projects. This was his latest strict instruction to ministries to deliver results.Various Parliament committees have also issued similar instructions. Cabinet ministers and secretaries have repeatedly instructed government officials to be result-oriented. Yet, a report this week by the Office of the Auditor General shows that four months into the fiscal year, only 11% of the budgeted capital expenditure has been spent. More frightening: the government spent three times that amount on salaries, administrative costs an overheads.“It is clear that issuing instructions alone will not work,” says economist Keshav Acharya, “instead of more instructions we need to pinpoint obstacles to implementation of projects and remove them.”Read also: <a href="https://www.nepalitimes.com/editorial/communist-capital/" target="_blank" rel="noopener">Communist capital</a>, EditorialHowever, the government already has monitoring and evaluation mechanisms in place: at the Prime Minister’s Office, the National Planning Commission, and the finance and other ministries have their own project assessment committees. Most experts blame the lack of accountability in the political leadership and a lethargic bureaucracy.There was hope that with a strong government commanding a <a href="https://www.nepalitimes.com/editorial/two-thirds-empty/" target="_blank" rel="noopener">two-thirds majority in Parliament</a>, and devolution of power to local governments, things would change. But not only has the development budget remained unspent, but there has been shocking over-spending in current expenditure (administrative cost, salaries, vehicle purchases, or allowances on foreign trips). In the first quarter, the national government spent three times more on current expenditure than on capital disbursement.The government is spending on cars, but not on maintaining roads. Whatever little is disbursed is mis-spent on unnecessary projects like this road that cuts through an ecologically sensitive wetland in Pokhara Valley (above).Most provincial governments have managed to spend even less – only about 1% of their capital expenditure in the first quarter.The inability to spend the development budget has been a chronic malaise in Nepal, but this year, it is worse because of Kathmandu’s reluctance to devolve financial decision-making to local governments. This has triggered a <a href="https://www.nepalitimes.com/here-now/crunching-the-numbers-on-credit/" target="_blank" rel="noopener">credit crunch in the banking sector</a> creation and encouraged migration. At this rate the government will not meet its <a href="http://archive.nepalitimes.com/regular-columns/guest-editorial/guest-editorial-Nepal-economic-growth,923" target="_blank" rel="noopener">8% growth target</a> this year.Says economist Dilliraj Khanal: “The entire system of development administration has become so ineffective that unless it is overhauled, we will not see growth and progress.”Read also:<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/banner/calendar-of-economic-change/" target="_blank" rel="noopener">Calendar of economic change</a>, Om Astha Rai<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://archive.nepalitimes.com/article/editorial/editorial-Nepal-economy,3746" target="_blank" rel="noopener">White swans</a>, Editorial<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://archive.nepalitimes.com/regular-columns/guest-editorial/banking-crisis-explained,1096" target="_blank" rel="noopener">Banking crisis explained</a> , Suman Joshi

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Roadblocks

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171136/636934779c7e80680e03dff9jpeg.jpg" alt="" width="1400" height="1069"/><figcaption>Bhanu Bhattarai</figcaption></figure>Nepal’s banks have once more entered the dark tunnel of scarcity of loanable funds. Commercial banks have misinterpreted the monetary environment for three years in a row -- they lend aggressively during the first quarter, and run out of steam thereafter until the final quarter of the fiscal year.The seeds of the trouble were sown five years ago. As the IMF puts it in its most recent South Asia Regional Update, ‘Loose monetary conditions, along with a fourfold increase in banks’ paid-up capital in the two years to mid-2018 required by the Nepal Rastra Bank (NRB), have fueled a strong credit expansion. Private sector credit growth has averaged 22% (y/y) in the past two years, even as the NRB maintains ceilings on banks’ loan-to-deposit ratio and the loan-to-value ratio on car loans.’Nepal’s financial landscape is heavily skewed towards banking. According to a recent World Bank report, banks account for 87% of financial sector assets in Nepal. Private equity and venture capital space are still in nascent stages. The <a href="https://www.nepalitimes.com/banner/why-the-private-sector-is-spooked/" target="_blank" rel="noopener">private sector</a> thus largely depends on bank debts, and in their absence, businesses have had to postpone plans or slow down operations. This has resulted in increased cost or lost opportunities.Recurring <a href="https://www.nepalitimes.com/here-now/crunching-the-numbers-on-credit/" target="_blank" rel="noopener">credit crunches</a>, which last several months every year, have impacted the economy as a whole. Key responsible parties here are:<ul><li>Government of Nepal for its inability to spend on capital expenditures</li> 	<li>NRB for instigating the crisis and then offering regulatory forbearance that encourages banks to push prudential boundaries</li> 	<li>Banks which appear to be driven with the sole objective of servicing increased capital</li></ul>Nepal’s economic growth over past two decades has been largely led by the private sector, in spite of ineffective governments and inefficient bureaucracy. Banks should refrain from pointing fingers at NRB or the government. The NRB has not always been pro-active, its regulatory approach has often been ‘one step forward two steps back’. The government’s norm has always been to bulk up capital expenditure towards the end of the year. We want NRB and the government to be more responsive, but it will be a gradual process at best. And frankly, the banking business has thrived even in this environment, so let’s be reasonable.Read also: <a href="https://archive.nepalitimes.com/regular-columns/guest-editorial/banking-crisis-explained,1096" target="_blank" rel="noopener">Banking Crisis Explained</a>, Suman JoshiAs the most transparent sector of the economy, the onus is on the banks collectively to manage public perception and repair the community’s battered image. Here’s a list of items they need to consider:1. Anticipate better, and get your basics right. Will the market offer sufficient new deposits to fund growth in loan books? Nepal may be more stable politically, but with compromises from bureaucrats and politicians, it will be a while before their Key Performance Indicators align with Nepal’s aspirations for rapid economic growth. It is unrealistic, this early, to expect government spending to veer from tradition to follow a desired timeline that match banks’ need for new deposits.2. Who is winning that debate in the boardroom? Most banks appear to have adopted a strategy to grow lending books aggressively to meet shareholder expectations of return on equity. The impact of this on their lending behavior is worrisome. What is the quality of loan assets banks are booking when they are expanding at 22% while the economy grew at 3-4% annually over last few years? Also the continued contribution of banks to real estate buoyancy may someday come back to haunt them. Excessive reliance on real estate as collateral has affected a loan officer’s approach to lending. Under the current loan loss provisioning norms and multiple banking context, it is possible to keep masking bad loans, which raises doubts about quality of profits. The IMF has singled out this challenge and suggests: ‘Rapid credit growth underscores the need to accelerate banking sector reforms. Building on the recent amendments to the regulatory framework, loan classification, provisioning, and banks’ risk management practices should be upgraded.’3. Is it possible that many banks have bitten off more than they can chew by expanding their operations and branch network rapidly? Frequency of operational risk events suggests that quality of human resource and internal control mechanisms need significant improvement.Banks have finally acknowledged the need to adopt digital channels of delivery. Better late than never. Even so, there is little chance of sufficient investment happening here. It is not enough to link bank systems to a digital payment platform. A key driver for consumer uptake is a cultural shift within individual banks to champion digital banking services.Read also: <a href="https://www.nepalitimes.com/banner/nepals-budding-e-commerce-ecosystem/" target="_blank" rel="noopener">Nepal's budding e-commerce ecosystem</a>, Sikuma RaiClearly, Nepal is an over-banked economy with smaller banks struggling to stay relevant. Industry experts agree that there is a case for reduction in number of banks. Market prices are currently at interesting levels for more capable banks to consider acquiring other institutions. It may be easier said than done, but if there is an industry-wide resolve, the ducks will line up.Suman Joshi is a former banker and Founder and Chairman of True North Associates, a private equity firm.

Banks biting off more than they can chew?

One Friday night last month, we were swapping stories about Vipassana, a rigorous <a href="https://nepalitimes.com/opinion/comment/practicing-mindfulness-in-schools?fbclid=IwAR2X1T9SNG1tWe61UPqMUgHjOWNZ4U1foJyURLJMrjYAsUdr4u_mz1rmC1U">meditation</a> technique of silent observation, over dinner. We spoke of its ten days of noble silence, of respiration, observation, and sensation.&nbsp; I told them about my first retreat in Lumbini last year when my mind kept getting distracted: ‘What is happening in the outside world? Is <a href="https://nepalitimes.com/here-now/those-were-the-days-knea0341">K P Oli still prime minister</a>? When I emerged ten days later, he was still PM. During my second Vipassana in February this year, I reassured my mind that nothing dramatic could unfold in ten days. Still, my gut knew this country was always one headline away from <a href="https://nepalitimes.com/editorial/trial-by-fire">revolution</a>. By my third retreat, I was confident, even cocky.&nbsp; At that dinner, I joked: “What could possibly change? If Oli survived my first two meditation retreats, the world can hold steady for a third.” I should’ve known better. On 1 September, I was back at Shivapuri for the second time, my third retreat, with no expectations — only hope that ten days of noble silence would peel yet another layer from my mind.&nbsp; Vipassana is a paradox: brutally difficult, yet infinitely generous. It is the tool needed to tame and know your unconscious mind, and to know yourself even a little through it is a profound achievement. My room at Z House had the best view of the Kathmandu Valley. I developed a ritual: press my hands against my cheeks and stare down at the city. The city below looks chaotic, but somehow beautiful in its stubbornness, where pollution and pride coexist. From up there, it looked like no one was free, trapped in their egos, pettiness and misery.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250913090920_9e77930ed911289c05a731605157f402c06249347e33964dc59c58d32dc2a6d6.jpg" data-media-id="editor_3" data-image-id="20250913090920_9e77930ed911289c05a731605157f402c06249347e33964dc59c58d32dc2a6d6" data-rendition-name="original" width="3000" height="1300" loading="lazy" alt="Vipassana during Nepal revolution"> <figcaption>Those undergoing Vipassana in Sundarijal had no idea of the chaos and mayhem the country was undergoing. Photos: AARSALA ADHIKARI(Photo: Sonia Awale)</figcaption> </figure>  Then, softer thoughts of Metta and compassion would emerge. If only every single person could sit in silence and know their breath, just once. Blessed with ten days of Dhamma teachings on universal law, I imagined our 334 patriarchal parliamentarians and the <a href="https://nepalitimes.com/editorial/house-of-cards?%2F">Oli, Deuba, Prachanda trinity</a>. UNSEEN CHAOS On the seventh and the eighth days of Vipassana (8–9 September) there was <a href="https://nepalitimes.com/news/kathmandu-burns-despite-pm-resignation">black smoke rising from the Valley </a>below. Why were people burning all that garbage? There was no traffic on the straight road down from Budanilkantha. There were gunshots, and I assumed locals were shooting at marauding monkeys. I mistook the sound of helicopters at night for flights circling after takeoff.&nbsp; On the ninth day and in the morning of the tenth, it rained heavily. I tried to spot Dharara like I did every day, but the city was shrouded in a blanket of thick black smog. Even after two days of heavy rain, the smoke had not been washed down. This did not make sense, but my mind had returned to the safe harbour of my meditation. Nothing to see here. On the morning of 9/11, the tenth day, as we emerged from silence, the hall outside filled with chatter. Many people left, weeping, overwhelmed by the experience of the past ten days. We joked about our hardships and dreamt of delicious food, feeling a wave of accomplishment after a documentary about how Vipassana had transformed Tihar Jail in New Delhi.&nbsp; The hall radiated with inspiration and hope. Then, as the film ended an assistant teacher made an announcement: “There are serious protests going on in the Valley. K P Oli has resigned as prime minister. There are no cabinet ministers. The military has taken over, and a curfew has been imposed.”&nbsp; The news hit like a lightning bolt. Mental tranquility gave way to gasps of “What the f**k?” In the main Dhamma Hall, some women erupted in applause. We had spent ten days cultivating Metta, only to step out and realise the world had erupted into chaos. We huddled, trying to piece together fragments of what was happening. The Valley was <a href="https://nepalitimes.com/here-now/nepal-turmoil-will-hit-tourism">still covered in black smoke</a>, the main road was still quiet. A neighbour turned up the radio, reporting deaths, destruction and curfew.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250913050944_ce09e04207ef5eb72ea55800b76df0c16a9d46a3eea957a4ecb0d67e978c2595.jpg" data-media-id="editor_7" data-image-id="20250913050944_ce09e04207ef5eb72ea55800b76df0c16a9d46a3eea957a4ecb0d67e978c2595" data-rendition-name="original" width="1440" height="1200" loading="lazy" alt="Meme doing the rounds on social media"> <figcaption>Meme doing the rounds on social media. </figcaption> </figure>  A first-time meditator, Shivani Karn, overheard a neighbour from wall cross telling his son that people had been shot and that he should not go to school any more. She had wanted to flee the Centre, but stayed on. Stranded foreigners from Argentina to China were bewildered and terrified. Volunteers debriefed us, recounting the shocking details: buildings burning, ministers’ houses ransacked, Oli fleeing, Deuba and his wife beaten up. The leaders were all in the Shivapuri barracks up the mountain. Over 15,000 inmates had broken out of prison. It was a catastrophe unfolding in real time. The city felt ripped out from a nightmare. In the common space, people complained about <a href="https://nepalitimes.com/news/nepal-s-gen-z-protest-turns-deadly">corruption and the ban on social media</a>. But an understanding emerged: both those in power and those who grant it are bound by the law of cause and effect. Driving down from Shivapuri on the morning of 12 September, my heart sank. The smog I had seen was smoke from still smouldering buildings. It was not garbage burning, but the rage of the people. Those were not people scaring away monkeys, but guns that killed innocent lives. The sound of aircraft were actually helicopters rescuing politicians.&nbsp; We drove past Singha Darbar, a charred ruin. Another Vipassana meditator, Anjali Baidya, shared a chilling memory. She recalled being 12 years old in 1973, watching from her home in Makhan Tole as Singha Durbar first caught fire. History had repeated itself 52 years later.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250910140912_e6bf05bfe95f519e05ab8d9016587211b241340fd23a0f9ae728e74747fc5f29.jpg" data-media-id="editor_9" data-image-id="20250910140912_e6bf05bfe95f519e05ab8d9016587211b241340fd23a0f9ae728e74747fc5f29" data-rendition-name="original" width="8064" height="6048" loading="lazy" alt="Nepal in ashes"> <figcaption>Singha Darba, the seat of the government, set ablaze on 9th September. Photo: KAMAL PRASAI</figcaption> </figure>  One Bhatbhateni supermarket after another were scorched, police stations, government offices, once symbols of everyday life. There were soldiers everywhere, not police. &nbsp;Amidst the devastation, a deeper truth settled in. This, too, was Anicca — impermanence. Anicca teaches us that all things are constantly changing, including our thoughts, emotions, and physical sensations. Political systems, power structures, national crises are all transitory. This understanding is crucial for healing. When we cling to the idea that a leader, political system or ourselves are permanent, we set ourselves up for disappointment and anger when it inevitably changes. The Dhamma teaches that responsibility is shared. The anger and fear on the streets are similar to feelings many carry inside. We Nepalis have intergenerational trauma. What I saw was not an abstraction: the gunshots and chaos echoed the terrifying nights of 1 February 2005 in Panauti, a grim replay of the fear I knew as a child at Malpi school, huddling with friends for safety.&nbsp; Read also: <a href="https://nepalitimes.com/news/what-next-nepal">What next, Nepal?</a>, Shristi Karki Our national history is a series of ruptures that become personal landmarks. I was nine years old at my aunt’s birthday party on 1 June 2001, when the celebration was abruptly called off and we were sent home into the silent shock of a royal massacre.&nbsp; This pattern must be broken, and it starts now. The path to national healing must begin with individual healing. We can learn from the story of Angulimala, a violent figure who was transformed by the Buddha’s compassion. The Buddha walked steadily toward him and said, “I have stopped, Angulimala. You must stop too.” Angulimala realised the truth, renounced violence, and was enlightened. Cycles of anger and conflict can be softened and transformed. Nepal’s long-term well-being depends on our ability to approach the Dhamma as a pragmatic tool. Inner calm can help us process collective trauma. By cultivating forgiveness and compassion, we can create a stability that begins within. True healing begins when we stop externalising our pain or intellectualising our emotions, and start nurturing our own inner peace. As the dust settles, the true noise begins: the roar within. We are left with a stark choice: remain trapped in this endless loop of rage, or we can deliberately choose to stop. The Dhamma is not some philosophy for a meditation centre; it is the raw truth of our applied wisdom. <a href="https://nepalitimes.com/news/madam-prime-minister-of-nepal">Sushila Karki, Nepal’s first female prime minister</a>, may have emerged as a new ‘messiah’ but we must begin to take responsibility and accountability. Change cannot come from chaos, it is a conscious effort we must make precisely when it feels most impossible.&nbsp; The path forward is not through the streets, but inward — into the ruins of our own self-righteousness. The disparity and deep-seated grudges are the quiet kindling that have brought this new revolution. The rage on the streets is about suppressed dignity, and a burning hunger for justice.&nbsp; It is time to check the recesses of our minds and hearts, sit down, breathe, and to ask: “When do we stop running, and when do we start healing?”&nbsp; Alisha Sijapati is a writer specialising in cultural heritage, and a former Nepali Times correspondent.

Vipassana during a revolution

After prolonged negotiations over the weekend, Nepal’s new <a href="https://nepalitimes.com/news/madam-prime-minister-of-nepal">Prime Minister Sushila Karki</a> on Monday appointed three members to her Council of Ministers, but the youth group that put her in power does not like her choice. The GenZ group that initiated the movement that toppled Nepal’s government accused Karki of not being consulted about the choice of Om Prakash Aryal, a lawyer who was helping with negotiating with the Army, as the Home and Law Minister.&nbsp; GenZ’s purported leader <a href="https://nepalitimes.com/here-now/who-or-what-is-hami-nepal">Sudan Gurung</a> led a group of his supporters and families of youth killed in <a href="https://nepalitimes.com/news/raising-nepal-from-the-ashes">last week’s demonstration</a> at a midnight protest outside the prime minister’s residence, demanding Karki’s resignation unless she listened to them. Aryal is also a legal adviser to Kathmandu Mayor Balen Shah, who has supported the GenZ movement but refused their offer to lead the interim government.&nbsp; The other two ministers include former Finance Secretary Rameshore Khanal as Finance Minister, and the popular former chief of the Nepal Electricity Authority (NEA) Kulman Ghising as the Energy Minister, Urban Development Minister, and Minister of Physical Infrastructure and Transport. They were sworn in on Monday. While Prime Minister Karki has said she wants competent and honest technocrats in the Council of Ministers, GenZ has been pushing for candidates that do not seem to meet her criteria — including a military officer and Mayor Balen Shah’s candidate.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025091511090_f7db633bbf56c5e2a43b6cd248e522365f56cd34578d65cdeca243c65d807f6d.jpg" data-media-id="editor_3" data-image-id="2025091511090_f7db633bbf56c5e2a43b6cd248e522365f56cd34578d65cdeca243c65d807f6d" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="new ministers being sworn in"> </figure>  Karki’s list is said to include retired Lt Gen Balananda Sharma, &nbsp;Magsaysay Award winner Mahabir Pun of the National Innovation Centre, former Education Minister Sumana Shrestha who quit RSP on Sunday and Dharan Mayor Harka Sampang. Karki met the government machinery on Sunday at her Singha Darbar office. Speaking without a prepared text, she admitted that there had been a “huge loss” not just to government buildings but also to official and court records during the 9 September arson attacks. “I am ashamed to say that there has been a systematic targeting of sensitive and essential government institutions, we will track down the perpetrators and investigate them,” she said. Karki also assured officials that she had no intention of staying on as prime minister beyond 5 March, the date she has set for early elections. She added: “The destruction by criminal elements has added to our challenges, but we have to choose but to unite and rebuild. This movement was about ending corruption, improving governance and equality. Help me achieve those goals.” <h2>KNOW YOUR MINISTERS</h2> Om Prakash Aryal Home Minister, Minister of Law  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250915110916_6bbaa39c523979ea1a3e85bd496232fa0dcb6152718ede106078bb5f3d069c3c.jpg" data-media-id="editor_4" data-image-id="20250915110916_6bbaa39c523979ea1a3e85bd496232fa0dcb6152718ede106078bb5f3d069c3c" data-rendition-name="original" width="960" height="955" loading="lazy" alt="Om Prakash Aryal"> <figcaption>Om Prakash Aryal</figcaption> </figure>  Back in 2016, <a href="https://archive.nepalitimes.com/article/nation/do-gooders-to-watch-out-for,3435">Om Prakash Aryal</a> filed a writ petition against the appointment of all powerful Lokman Singh Karki to the Commission for the Investigation of Abuse of Authority (CIAA), paving way for the impeachment of the head of the anti-graft body together with Prime Minister Sushila Karki, who was then Chief Justice. An advocate at the Supreme Court, Aryal gained widespread fame for his work in Public Interest Litigation. Most recently, earlier this year he filed a petition against then Prime Minister K P Oli and Minister for Land Management Bala Ram Adhikari, among others, for their alleged role in the non-implementation of Supreme Court order in the Giribandhu tea estate land scam in eastern Nepal. Aryal came from Gulmi to Kathmandu to be a singer, but ended up pursuing a career in law instead. Aryal also served four years in the National Human Rights Commission (NHRC), and was based in Geneva with the International Commission of Jurists (ICJ). Rameshore Khanal Finance Minister  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250915110916_1655aeec3a17a048663b95c0dec3ab302300c51d61f6aed682b17fe5c1532c58.jpg" data-media-id="editor_6" data-image-id="20250915110916_1655aeec3a17a048663b95c0dec3ab302300c51d61f6aed682b17fe5c1532c58" data-rendition-name="original" width="1000" height="666" loading="lazy" alt="Finance Minister"> <figcaption>Rameshore Khanal</figcaption> </figure>  Former Finance Secretary Rameshore Khanal has over 30 years of experience in the civil service, and led reforms in government accounting and reporting, public procurements, tax policy and administration. He also served as Chair of the Board in Agricultural Development Bank and was Board Director in Nepal Rastra Bank, Rastriya Banijya Bank, Nepal Telecom Company, and Nepal Airlines. He also served as an economic adviser to Baburam Bhattarai when he was prime minister in 2013. In October last year, <a href="https://nepalitimes.com/news/nepal-in-the-red">he led the government formed</a> the High Level Economic Reforms Recommendation Commission. The 440-page recommendation released last month included review of the fixed exchange rate with India and the provision for national political parties to receive grants so candidates did not have to depend on business donors at election time. He has announced that he is not going to take a salary, official residence, body guard or official car for himself. Kulman Ghising Energy, Water Resources and Irrigation Minister, Urban Development Minister, and Minister of Physical Infrastructure and Transport  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250915110920_7704ba4dd27f06d423852bc9792610cc89acdbee6ff0b380904479c095d328ab.jpg" data-media-id="editor_8" data-image-id="20250915110920_7704ba4dd27f06d423852bc9792610cc89acdbee6ff0b380904479c095d328ab" data-rendition-name="original" width="1057" height="769" loading="lazy" alt="Kulman Ghising"> <figcaption>Kulman Ghising</figcaption> </figure>  The man credited for ending 18-hour-a-day loadshedding in Nepal was also considered for the post of Prime Minister before Sushila Karki was chosen by the GenZ movement on Friday. Ghising is a two-time CEO of Nepal Electricity Authority (NEA) before <a href="https://nepalitimes.com/news/sacking-of-nea-chief-exposes-cronyism">his tenure was cut short</a> by the Oli-led governing coalition earlier this year and replaced by Hitendra Dev Shakya. Ghising’s removal was seen as being politically motivated, and outraged the public and commentators. Many expected Ghising to open his own party ahead of the 2027 elections two years later, but is seen to be close to the Maoist-Centre party. After being appointed NEA chief in 2016, Ghising cut off the dedicated electricity feeds to industries, and redistributed the saved power to the public — ending long power cuts. But he also imported electricity from India to ensure 24-hour supply during the winter dry season to meet demand. Several new hydropower plants came into operation during his tenure, and today Nepal had an electricity surplus.&nbsp; OTHER APPOINTMENTS Elsewhere, Sabita Bhandari Baral has been appointed Nepal’s first female Attorney General.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250915110920_4d60704a1e69309fdfb49a195f538c32159f27748fd2be88693c609ddb98d380.jpg" data-media-id="editor_10" data-image-id="20250915110920_4d60704a1e69309fdfb49a195f538c32159f27748fd2be88693c609ddb98d380" data-rendition-name="original" width="730" height="506" loading="lazy" alt="Female attorney general"> <figcaption>Sabita Bhandari Baral</figcaption> </figure>  By Sunday, total casualties of the nationwide GenZ protests has reached 72. Prime Minister Karki has declared that bereaved families of those killed in the protests will be compensated while hundreds of those still receiving treatment in hospitals will be treated for free. &nbsp;

Nepal interim government faces first hiccups

While protesters were torching the Special Government Attorney Office at Mandala on Tuesday, they shouted slogans <a href="https://nepalitimes.com/news/nepal-s-gen-z-protest-turns-deadly">denouncing government corruption</a>. They did not seem to know that in reality the Government Attorney’s office was carrying out active investigations and prosecuting multiple cases of government corruption. Their case files have now been reduced to ashes. While attackers ransacked the building room by room and and burnt it down, they said they were protesting the government’s inability to catch the person who raped and murdered of 13-year-old <a href="https://nepalitimes.com/opinion/justice-delayed-and-denied">Nirmala Panta </a>in Kanchanpur seven years ago.&nbsp; In reality, the District Government Attorney’s Office has been carrying out and directing<a href="https://nepalitimes.com/news/justice-eludes-many-rape-survivors"> investigations against rapists and abusers</a> whose victims were even younger than Nirmala. As an ordinary Nepali citizen before joining the Government Attorney’s Office, I had read about &nbsp;Nirmala’s story in the media. It was a major case that shook the nation, and the biggest rape case I had heard about.&nbsp; But once I was behind my desk as a Government Attorney myself, not a day went by when there was at least one new rape investigation file. This was a serial horror on a nationwide scale. The <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/incest-sex-abuse,2547">rapists were not faceless strangers</a>: many were fathers, brothers, stepfathers, teachers, drivers who knew the survivors. I found all age groups from all parts of Nepal on those charge sheets. And every file I carried to the courtroom was in the hope of at least someone who wanted the crime against them recognised and the perpetrator punished. Now, all those files are gone. The news from Singha Darbar that the government’s data centre was saved from arsonists this week was a relief. But we lost all our records. The evidence was never digitised, there were no backup files. They lived only on paper, in ink, in fragile white file folders with green strings.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250914120920_353c6e03fa2f4cea8992c5c02ede101b4ad9ccc102f5af8407f333f518ef7200.jpg" data-media-id="editor_4" data-image-id="20250914120920_353c6e03fa2f4cea8992c5c02ede101b4ad9ccc102f5af8407f333f518ef7200" data-rendition-name="original" width="5000" height="3333" loading="lazy" alt="The day justice died"> <figcaption>Photo: HEMANTA SHRESTHA</figcaption> </figure>  When the building burned, so did the only record of those crimes and the identity of the criminals.&nbsp; Imagine entire basements filled with such files: each representing a victim, a face, a life. More than 10,000 such cases are now smouldering heaps of ash. Read also: <a href="https://nepalitimes.com/news/kathmandu-burns-despite-pm-resignation">Kathmandu burns despite PM resignation</a> Singha Durbar can be rebuilt brick by brick, just as it was after the earthquake. Who is going to rebuild these case files?&nbsp; The social media is cruel: it shows homes of politicians stashed with cash and charred dollar bills. But the media did not show an entire building full of criminal case files going up in flames. The smoke that filled Kathmandu’s sky on Tuesday carried away with it the hopes of<a href="https://nepalitimes.com/news/nepal-s-chance-on-transitional-justice"> justice of thousands of victims</a>, mostly young women. Our duty as Government Attorneys is to direct criminal investigations, prosecute criminal cases, plead in courtrooms, make appeals. On a normal busy day we prosecute at least five criminal cases involving survivors and perpetrators. THAT DAY On <a href="https://nepalitimes.com/news/nepal-s-8-september-massacre">8 September</a>, when the GenZ protesters were gathering at the Mandala outside, we were at the Police Club, attending the first ever Women Government Attorneys’ Conference. We wore our brightest blue sari uniforms and pressed blouses. Our heads held high, we celebrated our success as government attorneys who had led the prosecution of the highest number of cases involving <a href="https://nepalitimes.com/opinion/not-just-16-days-against-gender-based-violence">violence against women</a>. But the day had other plans for us. By 4 pm the program was halted after protesters were shot outside Parliament. The Attorney General directed us to go home immediately. As the hall emptied, a small group of us young women officers and one senior female advocate walked together through Bhadrakali towards our office. There was an angry mob approaching us. The moment they saw us in our official dress, they turned on us with verbal abuses — words so horrendous that it would have been enough to prosecute a slander suit.&nbsp; Heads and eyes lowered we walked on. They started spitting on us. Obviously, they were pouring out their <a href="https://nepalitimes.com/opinion/genz-and-aragalaya?amp=1">anger against the government</a> on us civil servants. But they had no idea that the senior female advocate on whose coat they spat had pioneered the law granting Nepali women equal property rights. To us, she was not just a lawyer, she was a hero and a figure we had worshipped in our law books. Her name appears across Supreme Court documents for setting a precedent.&nbsp; We ran to save ourselves from their wrath and reached our Special Government Attorney Office. The mob stayed outside. We waited two hours in silence, praying fervently until the street was calm enough for us to slip away and find our way home. The next day, 9 September, was much worse. The protesters had already torched Parliament, Singha Durbar and the nearby Supreme Court. Then they came to set the Government Attorney Office alight. As a Nepali, I can understand the anger. But as a Government Attorney, I carry a deep scar. There is an immense void and sorrow. This is not about the loss of a building, or being spat at. It is about the silent victims whose stories were stored in all those thousands of files. Many of the survivors do not even know that their <a href="https://nepalitimes.com/here-now/hunger-for-justice">struggle for justice</a> has ended.&nbsp; We are government employees never affiliated with any political party, doing our work honestly and independently. In the name of demanding justice, they destroyed the very place that delivered it. Mamata Shrestha is an Assistant District Government Attorney.

The day justice died

Nepal is gradually returning to normal after curfews were officially lifted on Saturday following Prime Minister Sushila Karki’s appointment as temporary executive head following this week’s violent unrest that toppled the government.&nbsp;
Karki dissolved Parliament on Friday night immediately after she was sworn-in as per the demand of youth activists who staged the nation-wide anti-corruption demonstrations this week. The date of the election has been set for 5 March 2026.
Karki made the rounds of Kathmandu’s hospitals to meet with demonstrators who were injured during the protests on 8 and 9 September in which 52 people were killed. Karki is also drawing up a list of candidates to join the Council of Ministers to be announced on Sunday.&nbsp;
Meanwhile, the four main political parties in Parliament and their leaders have been self-reflecting, admitting their mistakes and expressing the need for reform and internal democracy.&nbsp;
But they have also issued near-unanimous denouncements of the decision by the interim government to dissolve Parliament, calling for the Lower House to be restored immediately.
‘The government formed from the streets in an undemocratic and unconstitutional manner bypassing Parliament is contrary to the spirit of the movement that has demanded good governance in accordance with Nepal’s Constitution prevailing laws,’ read a joint press statement issued by eight political parties on Saturday.
The leaders of the UML, including Prime Minister K P Oli who resigned on Tuesday, the Maoists and the Nepali Congress are still in the Shivapuri National Park military base, and appear to be incommunicado.
The parties continued: ‘We strongly demand the immediate convening of Parliament to create an environment where the demands of the people and agitating groups can be addressed through an elected institution.’
The Nepal Bar Council, the country’s legal body, joined the political parties in calling the dissolution of Parliament unconstitutional. Legal experts had expressed concern about the constitutional processes to ensure PM Karki’s appointment as executive head in the lead-up to her taking office.
‘Nepal’s Constitution is the result of a broad national consensus and reflects the aspirations of its citizens,’ the Bar’s press statement read. ‘Such acts erode public trust in democratic institutions and threaten the very foundation of our constitutional system.’
The President’s move to dissolve the House of Representatives is also contrary to the Supreme Court’s previous decision on the restoration of parliament, the Bar’s stated, referring to the top court’s verdict after former PM Oli dismissed Parliament in 2021.&nbsp;
The Federation of Nepalese Journalists echoed similar sentiments in its own statement on Saturday which read, ‘The Federation believes that the unconstitutional appointment of the Prime Minister against the Constitution and the dissolution of the House of Representatives, which is contrary to the previous precedent set by the Supreme Court, show ill will towards democracy.’&nbsp;
Meanwhile, the GenZ youth who had voted in favour of Karki to lead the transitional government welcomed the dissolution of Parliament, and continue to demand that the interim government investigate the shooting of demonstrators this week. They also want mechanisms to ensure accountability and zero-tolerance against corruption.
‘We call for an open, sustained, and participatory national dialogue with the Interim Government and all political actors, one that ensures the meaningful presence of indigenous youth and structurally marginalised communities whose voices are not only heard, respected, and embedded but are also actively consulted in the shaping of the policies, institutions, and decisions that will define Nepal’s democratic future envisioned by us,’ read a statement issued by the Indigenous GenZ collective on Saturday.&nbsp;
Across the country, authorities have also begun to launch investigations into the vandalism and looting during the protests, urging citizens to return stolen goods. A former lawmaker from the Nepali Congress, which was a part of the coalition with the UML has filed a complaint against Oli alleging that he personally issued the order to security forces to fire at protestors on 8 September.