<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.

original

674x448

610x380

500x500

400x266

400x240

400x203

301x200

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

1250x600

1084x550

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?

<a href="https://nepalitimes.com/here-now/waiting-for-bipin-joshi" target="_blank">Nepali student Bipin Joshi</a>, who was taken captive by Hamas on 7 October 2023, was not on the list of those freed following the end of the bombardment and fighting in Gaza.&nbsp; On Monday morning, the Israeli military notified Bipin's family and Nepal’s ambassador to Israel Dhan Prasad Pandit, that there is no evidence of him still being alive. However, Nepal's Foreign Ministry is yet to be notified by Israel's government of Bipin's status. The news came three days after a US-brokered ceasefire between Israel and Hamas came into effect, and hostage and prisoner exchanges by the two sides started Monday morning.&nbsp; Almost 2,000 Palestinians held in Israeli prisions are expected to be released by Israel in exchange for the hostages during the next phase of the peace deal between the two parties, and the bodies of deceased hostages remaining in Gaza are also expected to be returned.&nbsp; Bipin Joshi was among a group of Nepalis who had arrived in Israel in 2023 just weeks before 7 October 2023 as part of a ‘learn and earn’ program to work and earn in kibbutz farms there.&nbsp; Along with other students Joshi had been working on a farm in Kibbutz Alumim in southern Israel near Gaza. <a href="https://nepalitimes.com/here-now/war-in-israel-earthquake-and-grief-in-nepal">Ten Nepali students were killed </a>while taking cover in shelters near their farms in two separate attacks by Hamas fighters.&nbsp; Joshi’s colleagues, fellow Nepalis who survived the attack, recall gunmen lobbing two grenades into the bunker that they had taken cover in. Bipin hurled one of the grenades out, they say, but the other one exploded, killing and injuring Nepalis inside. &nbsp;&nbsp;&nbsp;&nbsp; Shortly after, Bipin was captured by Hamas along with a Thai national and led away into Gaza. CCTV footage showed Bipin alive and at a hospital in Gaza on the day of the attack itself after he was taken hostage.&nbsp; Thirty-one Thai citizens, who like Nepalis worked in farms in Israel, were taken hostage during the Hamas attack, the highest number of foreign captives in October 2023.&nbsp; <a href="https://nepalitimes.com/news/deft-diplomacy-freed-thai-hostages">Deft Thai diplomatic engagement</a> with officials from Iran, Egypt, and Qatar brought about the release of 23 of its nationals in 2023. Five more Thai nationals were released earlier this year.&nbsp; In August, Joshi’s family visited Israel at the invitation of the government and urged the international community to push for his return. Bipin’s mother Padma and sister Pushpa have been at the United Nations to lobby for his release.&nbsp; His family last week also released a video clip of Bipin briefly speaking on camera, reportedly obtained by Israel and said to be filmed in November 2023, around a month after he was taken captive. Joshi looks healthy in that video.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251013091028_d551c7f88204c52217152fb5db655bb5a5f8bf2cff1e6a055326ebf64453ff9f.png" data-media-id="editor_3" data-image-id="20251013091028_d551c7f88204c52217152fb5db655bb5a5f8bf2cff1e6a055326ebf64453ff9f" data-rendition-name="original" width="2848" height="1528" loading="lazy" alt="Bipin Joshi NT"> </figure>  More than 67,000 Palestinians have been killed during the last two years of the genocide in Gaza. About 1,200 people were killed during the Hamas attack on 7 October 2023, while more than 251, including Bipin Joshi, were taken as captives.&nbsp; This is the third ceasefire implemented in Gaza since 7 October 2023 after previous ones in November 2023 and January 2025. This 20-point deal facilitated by intermediaries US, Qatar, Turkey, and Egypt included terms for Hamas to give up its arms, and for a devastated Gaza to be governed by a Palestinian body of independent technocrats, while Israeli troops will withdraw in stages from Gaza.&nbsp; Hamas has agreed to relinquish control of Gaza, but has rejected the demand for disarmament, saying the group will demobilise but is prepared to resume fighting if Israel breaches the ceasefire.&nbsp; Following the ceasefire, Palestinians in Gaza have begun long journeys back to homes reduced to rubble by Israel’s two-year assault on the strip. The flow of humanitarian aid in the city has also increased following the peace deal.&nbsp; Israel's closure of humanitarian corridors in the past months had blocked the entry of food and medicine into Gaza, causing widespread famine. The United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) has said that the restriction of aid into the beseiged city has left as many as <a href="https://www.unrwa.org/newsroom/news-releases/gaza-unrwa%E2%80%99s-lancet-study-reveals-alarming-surge-child-malnutrition">54,600 children acutely malnourished</a>.&nbsp; Meanwhile, US president Donald Trump landed in Israel on Monday as hostages were being released, and world leaders are expected to head to Egypt for an international summit to discuss the next steps in Gaza, Israel, and West Asia.&nbsp;

Nepali hostage in Gaza not alive: Israel

Jazz as healing music

Already trying to balance youth demands with legal provisions in the Constitution, Prime Minister Sushila Karki’s interim government faced yet another challenge over Dasain: a receding monsoon dumped unseasonal rain unleashing floods and landslides that killed at least 60, mostly in eastern Nepal.&nbsp; The government was rated positively for its early warning and the ‘visibility’ of its disaster response, with many comparing it to the inaction of the NC-UML coalition during last year’s floods.&nbsp; Government agencies and police proactively closed off hazardous sections of highways as Kathmandu was marooned from the rest of the country in the peak holiday season. Stranded passengers were taken care of, with police, army and local governments in Ilam coordinating rescue and relief efforts. Many of the problems were structural and inherited from decades of neglect and corruption in highway contracts. Shoddy bridges and encroachment of settlements along river banks have increased risk from more frequent extreme weather caused by climate breakdown. With Dasain over Tihar around the corner and the worst of the disaster behind, the Karki administration is trying to balance the separate demands of GenZ movers and shakers who installed her in office with constitutional provisions. It has not helped that the badly-mauled political parties are spoiling for a fight, and the three top leaders show little signs of stepping down. “Nepal’s movement did not happen in a democratic vacuum, so this government walks a very fine line in political legitimacy," says Bidushi Dhungel of the National Democratic Institute in Nepal. "In this fragile space, whatever the work done — or not done— by the interim government within its limited mandate, it may open up avenues for further dissent from old and new actors. They are &nbsp;caught between a rock and a hard place.” Civil society activists issued a statement on Wednesday calling on the main political parties to heed the writing on the wall and reform themselves. Signed by professor Krishna Khanal and former ambassador Keshab Mathema, the statement said: 'The main leaders of the main parties should say sorry, and voluntarily resign ... they must respect public sentiments and work to reform and transform their parties to be more accountable to the public, or risk being irrelevant.'&nbsp; Complicating matters further are the sometimes contradictory demands of various GenZ factions on punishing those responsible for the carnage and rampage of 8-9 September, Constitution and elections. Karki faces calls to immediately detain former PM KP Oli and Home Minister Ramesh Lekhak for their involvement in the massacre outside Parliament. Under pressure from GenZ delegates, Home Minister Om Aryal fired off a letter to the police to arrest Oli and Lekhak. But later at a confrontational midnight meeting at the prime minister’s residence in Baluwatar, all four security chiefs advised Karki that arresting the UML and NC ex-ministers could unleash violent confrontation on the streets. The interim government is in a bind. It has formed a committee headed by Gauri Bahadur Karki to investigate the killings last month as well as the arson and vandalism that followed. The question is: should it wait for the committee to submit its report before punishing perpetrators, or let police arrest those who can easily be identified in social media posts setting fire to Singha Darbar, the Supreme Court and other sites.&nbsp; GenZ’s Sudan Gurung faction has gone beyond its original demand to submit an 8-point ultimatum that includes the sacking of the Chief Justice and officials of the anti-corruption bureau.&nbsp; The Prime Minister is caught in the crossfire between managing the expectations of a movement that appointed her, and working within the framework of her interim government’s mandate and Constitution. But it is not just the government that faces challenges. The lack of clear consensus among youth factions and their outspoken collectives is surfacing.&nbsp; &nbsp;“This has been a leaderless and decentralised movement, and the traditional variables typically seen in a political revolt seem missing here," notes political scientist Sucheta Pyakuryal. “There is no organised structure, nor any ideological pull factor, therefore a big question is how much bargaining power does a movement like this have, and how sustainable will it be.” GenZ leaders seem to be in two main camps. Demands like the one for a directly elected prime minister, and the constitutional processes that can make for such an outcome, have emerged as a major point dividing the movement.&nbsp; Nepalis both within and outside the youth movement are watching Hami Nepal’s Sudan Gurung closely — especially after his recent interview with Al-Jazeera during which he expressed his interest to run for Prime Minister and seemed to not accept a win by political parties in the March elections.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251009201044_fcba7e92bb9a8812fd0ad4e9770d6f4d4189972de5229f91e9a832a26e388901.jpg" data-media-id="editor_0" data-image-id="20251009201044_fcba7e92bb9a8812fd0ad4e9770d6f4d4189972de5229f91e9a832a26e388901" data-rendition-name="original" width="2916" height="1000" loading="lazy" alt="One month on NT"> <figcaption>GROUND ZERO: The destroyed centre of Nepal's government with Singha Darbar (in green scaffolding), the Attorney General's Office, Supreme Court, and in the distance, Parliament building. Also seen are the nearly finished new Parliament Complex and the new Supreme Court buildings. Drone shot taken on Thursday morning. Photo: SUMAN NEPALI</figcaption> </figure>  Gurung’s participation in the NDRRMA’s disaster management meeting and manner of his interaction with officials at the event was met with both bouquets and brickbats. Interestingly, some of the criticism was youth activists themselves. &nbsp;“There's a lot of self-involvement and self-importance that seems to be guiding a fragmented young leadership, as opposed to constructively engaging in how to concretise reforms,” says Dhungel. “There seems to be very little stocktaking of what's happened in the past, and what's happened in other countries to try identify where lapses could be before they occur."&nbsp; In the absence of unified positions and level-headed leadership, the youth who spearheaded post-protest negotiations, as well as the GenZ movement in general, risk losing public goodwill already dented by the destruction of state property on 9 September. This also leaves an opening for political parties which are on the defensive and licking their wounds to capitalise on youth discord.&nbsp; Says Pyakuryal: “Post revolution, the political landscape becomes extremely unpredictable and therefore there is a risk of co-optation from several Machiavellian political actors including political parties, monarchists, as well as other forces, and that is concerning.” The immediate and visible transformation that Nepal’s youth expect will not manifest right away, and while there is a need for long-term political planning, the caretaker government must also undertake measures that have a palpable impact on the daily life of citizens. &nbsp;&nbsp; “While youth frustrations must be addressed urgently, statecraft isn’t just about fulfilling short-term goals,”says Pyakuryal. &nbsp; Many, including the youth themselves, now see the need for GenZ to have a more united stance and to move beyond making demands that the interim government cannot fulfil and start mobilising for elections — even by forming its own party.&nbsp; A strong showing in elections can enable them to enact the changes they want to strengthen Nepal’s democracy, and make future governments more accountable.&nbsp; This week, the Election Commission announced 16 November as the deadline to register new parties for the 5 March polls.&nbsp; Youth representatives have said that they want to be active participants in the political process, particularly in national-level politics. The Constitution defines ‘youth’ as being between the ages of 16-40. In the 2022 elections, the Election Commission stated that over 41% of locally-elected representatives were from ages 21-40 years.&nbsp; If young Nepalis are to contest the election outside the banner of mainstream parties, this leaves electoral aspirants little more than a month to decide whether to form a loose coalition with existing parties, a separate political party, or to contest elections independently. “This is first of a kind movement, where political language is digital, not ideological, where organising is done through online platforms and where there is no one leader spearheading the movement,”says Pyakuryal. “I don’t know if ‘anti-corruption’ or ‘political reform’ have a strong enough ideological pull to band people together in the long run.” Indeed, the RSP was formed only four months before the 2022 elections and cashed in on anti-incumbent and anti-corruption sentiments of voters — mainly driven by social media. But controversy and strife within their party means it has largely lost its public trust.&nbsp; Nepal’s September Uprising and its aftermath have shown that a majority of young people are entirely disillusioned with establishment parties and politicians, even using ‘ex-political parties’ as a phrase of reference. Any new young political figures that emerge from this movement and this election will have to work with mainstream parties in a multiparty democracy.&nbsp; &nbsp;“The reality of politics is that change is not possible without engaging with existing political institutions and actors,” says Dhungel. “To say that they do not want to engage, negotiate, or identify allies or proactively seek out input from at least the reform-minded individuals within each of those outfits is political naivety, and may lead to a lack of institutionalised reform.” However, Dhungel notes that the youth leadership would have more agency if they are clear not just on what they want to change, but about whether they are interested in active politics or civic engagement. “The window of opportunity that is fast closing is to really negotiate hard and push for internal reforms within political parties and across the electoral system,” she adds. Pyakurel also adds: “GenZ are smart and politically mature, I hope they see these loopholes. I am optimistic about the direction they take.”

One month on

7:30pm Tuesday, 9 September.&nbsp; I was driving my daughter back from a relative’s house in Baneswar where she had taken refuge after a curfew was declared the previous day while she was in school. She was riding pillion on the back of my moped. We drove past Parliament <a href="https://nepalitimes.com/news/nepal-s-8-september-massacre">where 19 people had been killed by police </a>the previous day. We passed Thapathali, where the Kantipur highrise was on fire. The sky had gone dark, and the stinging smoke made it hard to breathe. A gas cylinder exploded, and the crowd dispersed briefly. The blast provided a moment to escape the raging mob. By myself I may not have been so scared, but my daughter’s safety made me more afraid. I had never been this frightened in my journalism career, even while covering the Maoist insurgency 20 years ago. At the Tripureswor intersection there were more angry crowds. The further we got from the epicentre of the GenZ demonstration, the more elderly the protesters looked. Many were muscular gentlemen with tattooed arms. Prime Minister K P Oli had just <a href="https://nepalitimes.com/news/kathmandu-burns-despite-pm-resignation">resigned</a>, but the crowd was still chanting “के पी चोर, देश छोड”. Soon, we were surrounded by an enraged mob. &nbsp;My survival instinct took over, and I started shouting “के पी चोर” and my plucky daughter screamed from behind “देश छोड”. Father and daughter waved at the &nbsp;protesters, and gave them a thumbs up. &nbsp;We finally got home, scared and smelling of burning rubber and smoke.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251007031028_c5c04095cdb6f0b24cdc2cc60bf627f49c15e0cf9b509ad149df35a2e73e1d3f.jpg" data-media-id="editor_2" data-image-id="20251007031028_c5c04095cdb6f0b24cdc2cc60bf627f49c15e0cf9b509ad149df35a2e73e1d3f" data-rendition-name="original" width="1200" height="1600" loading="lazy" alt="Reporter's diary of 8-9 September"> <figcaption>A building in Baneswar was damaged by protesters. </figcaption> </figure>  ARSON AND LOOTING I was born in the remote mountains of western Nepal in Rukum, the district that was the stronghold of the Maoist guerrillas after they launched an armed struggle in 1996. I moved to Kathmandu for higher studies, and as a student witnessed the popular uprising of 2006 against Gyanendra’s absolute monarchy. I have covered violence and chaos. I have been caught in the crossfire between the rebels and state security. I covered the violent <a href="https://nepalitimes.com/here-now/nepal-s-historic-youth-dissensus">street protests</a> of the 2006 People’s Movement that ended the war, the Madhes movement and the Indian blockade of 2015.&nbsp; But never was I more scared than during the 30-minute drive home through the city with my daughter at the back of my moped.&nbsp; Last month’s protests were initially led by youth groups which had loosely banded together as GenZ to protest corruption and impunity. On 8 September, I drove to the Mandala in my trusty moped to cover the rally, some protesters were in school uniform. There was singing and chanting. Just before noon, a slightly older group of protesters peeled off from the sit-in in front of Everest Hotel, broke through the half-hearted police cordon and moved towards the intersection outside Parliament. Most of the original young demonstrators remained at the sit-in, while the grownup protesters who were clearly not a part of the GenZ, started to break the perimeter wall of the Parliament complex. The young protesters looked a bit confused about what to do next as they also neared the Parliament gates. Violence was not a part of their plan, and the infiltration had begun in earnest. A group of organised older rioters broke through the western wall, even as police were concentrated along the main south gate. These agitators seemed focused on a single mission: to burn down the Parliament building, and they went about it purposefully.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251007031032_1fcd474774c8e110e833485cf54a7e63e8c8388ec78c2b4d3ae6e830c203c183.jpg" data-media-id="editor_4" data-image-id="20251007031032_1fcd474774c8e110e833485cf54a7e63e8c8388ec78c2b4d3ae6e830c203c183" data-rendition-name="original" width="1280" height="960" loading="lazy" alt="Reporter's diary of 8-9 September NT"> <figcaption>Blood seen in Baneswar.</figcaption> </figure>  Too late, the police used water cannons to disperse those by the south gate. I went closer, my press card dangling from my neck. A tear gas canister whizzed past my head. I was not able to see clearly, and backed away to safety. The police opened fire at point blank range, killing 19 protesters. Hundreds of injured were carried to the nearby Civil Hospital. There are many video clips on social media of task force police kneeling, taking aim with SLR rifles and shooting, they show protesters being hit and falling. The riot police fled, and the Armed Police Force and Nepal Army soldiers came out, but remained close to the trucks that had transported them to the intersection. Seeing that the security forces were not stopping them, the crowd then went on an arson rampage — it became a free-for-all as government buildings were set on fire one after another. Most of the arsonists were not GenZ, they were in the mid-30s, and I heard many shouting slogans for the<a href="https://nepalitimes.com/opinion/why-the-monarchy-still-sways-nepal-s-republic"> restoration of the monarchy</a>. Others were there simply to vandalise and loot. After having chased the police away from the Parliament building, they posted pictures and videos, having the run of the premises, instigating new arrivals to continue with the arson, and also brandishing looted automatic weapons. A curfew was declared, but this did not stop the rampage throughout that evening and into the night. Unable to return home, I spent the night in a friend’s office, and returned to the Parliament area the next morning. The black asphalt was dyed red with blood. Shoes, slippers and pieces of clothing littered the street. The next day, 9 September the much-feared and expected revenge attacks ignited. There was hope that the Army would be able to protect government buildings and provide public security, but the arson, vandalism and looting went unchecked — even when the seats of government were set on fire. The military did make an appearance, but only after 10pm to enforce the curfew, but by then the mob had already gone home.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251007031032_578cfa7c9e56f6ffcf1ca9b148e114a87b5332268cf97720584b70906823c074.jpg" data-media-id="editor_6" data-image-id="20251007031032_578cfa7c9e56f6ffcf1ca9b148e114a87b5332268cf97720584b70906823c074" data-rendition-name="original" width="1200" height="1600" loading="lazy" alt="Reporter's diary of 8-9 September NT"> <figcaption>A protester receiving treatment at Civil Hospital.</figcaption> </figure>  That was the moment I asked myself: Where have the students gone? Has the GenZ movement been hijacked? I could not see any of the GenZ-ers anywhere on 9 September. It was around midday of 9 September that millennials, including from groups like Hami Nepal came forward to the media, claiming to speak for the GenZ. They claimed to have led the protests. Others claiming to be GenZ said they were for the restoration of the monarchy, but they did not look the age.&nbsp; Mobs were out of control, burning down the prime minister’s office, the Supreme Court, the CIAA and the official and private residences of ministers. Within 27 hours Nepal became a country without a government, and leaders without homes. Important official documents went up in flames with the buildings that housed them. PM Oli resigned, too late to save the day. The Army occupied itself airlifting ministers from their official residences. Former prime minister Sher Bahadur Deuba and his wife foreign minister Arzu Rana Deuba were dragged out, beaten up and their home set on fire. They were rescued and taken to an army base. It became hard to tell over the next few days if the Army was providing them security, or keeping them incommunicado in detention. The Army was negotiating with GenZ as well as pro-monarchists at its headquarters, but moved the talks to President Ram Chandra Paudel’s office on 11 September.&nbsp; Former chief justice Sushila Karki was nominated interim head of government by GenZ delegates voting on Discord, and <a href="https://nepalitimes.com/news/march-to-5-march">mandated to hold elections</a> on 5 March.&nbsp; Will that happen? Things are too fluid at the moment. And my mind is still reeling from the fear and panic of that moped ride with my daughter through rampaging mobs. Did all that really happen in front of my eyes, or was it just a nightmare?&nbsp; Bhadra Sharma is a reporter for The New York Times based in Kathmandu.