The Bhutanese Leading the way.
The Member from Drametse–Ngatshang Constituency sought clarification on actions taken following the Anti-Corruption Commission’s investigation into the Economic Stimulus Programme (ESP), including measures to address the misuse of funds and strengthen accountability.
The Finance Minister informed the House that the funds associated with all three projects found by ACC had been returned to the ESP pool. He clarified that only one of the three projects had actually received a loan disbursement, while the other two, despite being approved by participating financial institutions, had not received any funds.
On the question concerning administrative action against financial institutions and officials for failing to exercise due diligence and proper oversight, the Minister said stated that the RMA’s review of the ESP medium-category loan portfolios, together with the ACC investigation findings, identified instances of non-compliance with the ESP Guidelines and other regulatory requirements.
Consequently, the RMA imposed monetary penalties ranging from approximately Nu. 700,000 to Nu. 1.7 million on three financial institutions and directed them to rectify identified deficiencies. The respective Boards of Directors also took administrative action against responsible officials, including warnings and written reprimands. However, the ACC found no conclusive evidence of corruption in the approval and disbursement of ESP loans.
The Minister further informed the House that the RMA had completed its review of medium-scale ESP loans. A total of 37 projects worth Nu. 1.91 billion were approved, while four cases under ACC investigation were excluded from the review.
The minister said the RMA review identified some shortcomings in documentation controls, record management, project monitoring, and compliance with lending procedures.
To strengthen governance and restore public confidence, financial institutions have been directed to implement a comprehensive Loan Origination System (LOS) and enhance credit governance frameworks. The new system is expected to improve transparency, strengthen regulatory compliance, establish a complete audit trail for lending decisions, and enhance accountability across the loan approval and administration process.
