The Bhutanese Leading the way.
Clarifying on the education loan being stopped by Tashi Bank, the Prime Minister (Dr) Lotay Tshering said that the government has no direct authority over banks.
The Royal Monetary Authority (RMA) has the authority to provide a loan and interest rate in accordance with the RMA act.
“If you study the RMA Act and the Financial Services Act, you would understand why the mentioned bank is providing the loan. In a financial service regulation act ‘a loan portfolio of bank cannot exceed roughly about 25 to 30 percent of loan given out. When a bank gives out too much education loan and if that loan exceeds 25 to 30 percent of the amount given out, the bank reaches its threshold and then RMA is going to penalize the bank for not obeying their regulation. So, its between them and the government is not involved,” Lyonchhen said.
Lyonchhen said, “T-bank is in discussion with RMA. Breaching the threshold is fine because the loan is of low risk in nature. So if RMA allows then T-bank will start to give the education loan again. The bank is ready to give the loan.”
Meanwhile, Druk Punjab National Bank (DPNB) is still offering education loans of the same type.
Lyonchhen said that its okay for an individual to go to abroad since there are less opportunities in the country right now, and if an individual goes there, back home they can support their family.
Lyonchhen went on to say that the government could have helped with the visas if they could, but they lack the authority.
“We also raised the same problem with the Australian Ambassador who visited us last week. We also believe that it will be helpful if financial institutions can assist the individuals,” Lyonchhen said.
Lyonchhen stressed that the government must have a strategy in place to eventually persuade Bhutanese to stay voluntarily rather than leave by offering better opportunities here.
“Will that occur immediately? Of course not. For this, the major reforms are in place. The primary goal of the reforms is to quickly transform Bhutan into a high-income nation. To achieve this goal, our economy must grow at a much quicker rate; we cannot wait for it to develop on its own. So people who are now going abroad are completely alright,” Lyonchhen said.
Lyonchhen further said that the economy has to be conducive as quickly as possible, and if the country wants to make it conducive, we must reform.
“We must now always be optimistic and see how things are changing and evolving,” Lyonchhen said.
