Thukten Zangpo 

The moratorium on housing construction loans, covering both residential and commercial, will end on June 30 this year, marking a significant shift after a year-long suspension.

Hotel construction loans, however, will still be under moratorium.

On June 26, the Royal Monetary Authority (RMA) notified financial institutions (FIs) that housing construction loans will be lifted.

Additionally, the RMA directed FIs to refer to the revised Prudential Regulations (PR) 2024 for risk-weight requirements on capital accumulation.

“The RMA will closely monitor the implementation of this directive and may conduct audits or require additional reporting as necessary to ensure full compliance,” the Authority said.

During its 210th board meeting on May 28, the RMA revised the PR 2017.

The RMA notification instructed FIs to comply with the new provisions outlined in the revised PR 2024 effective from July 1. This revision aims to enhance clarity and incorporate previously issued directives.

One key change is the provision applying a 150 percent risk weight to a loan exposure that exceeds 30 percent of a FI’s total loan portfolio.

“For those institutions whose exposure has already exceeded 30 percent, sanctioning of new loans shall attract 150 percent of risk weight, and this will be applicable as long as exposure is above the set limit,” the RMA stated.

This means that banks lending more than 30 percent of their total loans to a single sector will need to exercise greater caution. Such loans are considered riskier for banks due to the higher risk weight assigned.

During yesterday’s Meet-the-Press session, Finance Secretary Leki Wangmo said that the decision to lift the housing loan moratorium was reached in consultation with the finance ministry, RMA, and relevant agencies.

She added that the housing loan exposure (the total amount of money a bank has loaned out for housing to total loans), currently averages 31 percent for most FIs.

However, Leki Wangmo said that banks can resume lending if they maintain adequate capital reserves in accordance with the RMA’s directive.

 

What bankers say

A banker said that the loan exposure in the housing construction sector slightly exceeds 30 percent, with the exception of two insurance companies—Royal Insurance Corporation of Bhutan Limited and Bhutan Insurance Limited, which have exposures below 20 percent.

He added that the lifting of the loan moratorium applies specifically to residential and commercial housing construction loans, excluding hotel loans.

A banker clarified that residential loans do not attract the 150 percent risk weight, making lending for residential construction loans more accessible.

For commercial housing loans, the banker expects banks to prioritise providing additional loans to existing clients, while loan applications from new borrowers will undergo stricter evaluation.

As of February this year, the housing sector recorded the highest amount of credit at Nu 64.51 billion.

The RMA had suspended loans for housing and hotel construction effective from June 8 last year due to concerns over foreign currency outflow, high credit concentration, and the risk of non-performing loans in these sectors.

 

Vehicle import moratorium

Leki Wangmo said that the moratorium on vehicle imports that is to be lifted on August 18 this year, is still under review.

She added that the RMA, Finance Ministry, and Ministry of Infrastructure and Transport are working together to evaluate factors such as road capacity, traffic congestion, and the status of public transportation before making a decision.

The government initially imposed a moratorium on vehicle imports in August 2022. As of February this year, transport loans amounted to Nu 7.68 billion.

Chencho Dema

Punakha—Pema Dorji, 42, is among the six organic farmers who started cultivating strawberries last year in Peythari village, Kabjisa, Punakha. This year, from March to May, he completed his first harvest and earned approximately Nu 30,000 from sales.

Pema sold his strawberries to nearby high-end hotels and at the weekend vegetable market in Kaja Throm, Khuruthang.

This success is largely attributed to the Bhutanese Knowledge for Indigenous Development (B-KIND) initiative, a project implemented in Peythari by the Tarayana Foundation in collaboration with the College of Natural Resources in Lobesa.

B-KIND aims to conduct research in various areas including climate change adaptation, sustainable organic agriculture, holistic food systems, gender transformative change, and overall well-being.

The overarching objective of the project is to co-create and apply evidence-based scientific and indigenous knowledge to promote gender-transformative practices and inform policies. It aims to enhance the adaptive capacities, sustainable livelihoods, and well-being of vulnerable rural communities in Bhutan.

Launched on August 17 last year, the project is funded by the International Development Research Centre (IDRC) with a grant of 1.2 million Canadian dollars from the Government of Canada. It is also the first IDRC-supported project in Bhutan.

The initiative aims to generate knowledge through scientific and citizen research on locally suitable organic agricultural systems, and to implement action-oriented research on best organic farming practices.

Yesterday, the High Commissioner of Canada, based in New Delhi, visited the project site. During the visit, Sonam Yuden, the village Tshogpa, highlighted the benefits that the B-KIND project has brought to the farming communities in Peythari.

Addressing the gathering, she mentioned that Peythari village, with its 44 households, primarily grows rice.

However, irrigation has been a significant challenge, especially during the paddy transplanting season.

The existing 5-kilometre irrigation channel has faced issues such as erosion and seepage.

To tackle these challenges, the project provided 400 metres of HDPE pipes and materials for constructing inlet and outlet chambers.

This intervention has reduced seepage, resulting in increased water volume and enabling successful paddy cultivation this season.

Previously barren land due to inadequate irrigation water is now actively cultivated with paddy.

In addition to supporting rice cultivation, the project has provided greenhouses to six organic farmers for vegetable production.

These greenhouses are equipped with drip irrigation systems and six sentax tanks. As a result, these farmers are now able to grow various vegetables for their own consumption.

Sonam Yuden also highlighted the success of one organic farmer who started growing strawberries in a greenhouse and began selling his produce to nearby high-end hotels, significantly boosting his income.

She said that the six organic farmers participated in a study tour to Tsirang to learn about organic farming practices. As a result, two farmers have started their own small vermicomposting trials.

Expressing gratitude, Sonam Yuden thanked the Canadian government on behalf of herself and the community for their support.

She emphasised the significant benefits derived from collaborating with researchers from Tarayana and the College of Natural Resources, enabling mutual learning.

She expressed hope for continued support to further improve the community’s livelihoods.

The six organic farmers cultivate a variety of vegetables including beans, chilies, tomatoes, eggplant, carrots, and strawberries.

With three high-end hotels nearby, they are optimistic about establishing profitable relationships and generating substantial income.

Thinley Namgay

Thimphu Dzongkhag Court recently ordered Phajo Nidup from Paro to repay multiple loans availed from Druk Punjab National Bank (PNB) within six months.

Between 2018 and 2019, Phajo availed loans from PNB six times, amounting to more than Nu 300 million (M).

Phajo Nidup admitted to the court that he obtained these loans both in his own name and in the names of some friends.

PNB filed two separate cases against Phajo Nidup: one involving four loans totaling Nu 107M, and another involving two loans totaling Nu 200M. These amounts exclude interest and penalties.

The court mentioned that Phajo Nidup has only repaid one loan so far, amounting to Nu 21.5M. He took this loan in 2019 to build a five-storied house.

The case was complicated for the court because Phajo Nidup obtained the loans by mortgaging various lands to PNB. However, some of these lands were also mortgaged with other banks to obtain additional loans, which is not permitted.

Regarding the Nu 107M loan case, the court stated that if Phajo does not repay the loans on time, PNB can auction his mortgaged lands based on the current market rate.

If the auctioned items are not sufficient to cover the total loans, Phajo Nidup must pay the difference. The court also ordered that if there are no buyers for the mortgaged lands, PNB could transfer the thram to its company name.

Phajo Nidup explained to the court that his businesses did not perform well, which affected his ability to repay the loans.

In the Nu 200M loan case, which Phajo Nidup obtained in the name of  Tshering Wangyel, the court stated that PNB failed to follow the know-your-customer policy and lacked proper verification.

As a result, the court ordered Phajo Nidup to pay only 70 percent of the loans. The remaining 30 percent was divided among Tshering Wangyel and nine PNB officials with five percent, and   the company with 25 percent.

While deciding the case of Phajo Nidup versus PNB, the court noted deficiencies in the financial institutions. Some banks did not register the mortgages, some registered them without dates, and some mortgage agreements lacked dates.

Meanwhile, the court also ordered Phajo Nidup to repay loans to the Royal Insurance Corporation of Bhutan Limited (RICBL) within three months. Between 2008 and 2019, Phajo obtained seven loans totaling more than Nu 30 million in his name, his wife’s name, and the names of other friends.

Today, he owes Nu 36.243M including principal, interest, and penalties.

The court specified that if Phajo fails to repay the loans on time, RICBL could auction his mortgaged lands based on the current market rate. If the properties from the auction are insufficient to cover the total loans, Phajo Nidup is required to make up the difference.

Additionally, the court ordered that if there are no buyers for the mortgaged lands, RICBL could transfer the thram to its company name.

Chencho Dema

Punakha—Ap Pasang, 68, a resident of Yoesskha village in Kabjisa in Punakha tragically lost his only three high breed jersey cows to alleged electrocution on June 26, leaving him devastated and robbed of his livelihood.

For him, these cows were more than just livestock—they were like his own children and his sole means of earning a living.

The victim, according to his neighbours, depended solely on his three Jersey cows as his only source of income, as he does not own land and lives in his niece’s house in Yoesskha.

Ap Pasang relied on his cows for milk production, selling the milk, butter, and cheese to high-end hotels. With each cow yielding 13 liters of milk per day, their loss has dealt a significant blow to his livelihood.

The Tshogpa, who was informed by the victim himself, conveyed the news of the incident to the Kabjisa Gewog Office.

At the time of the incident, the 48-year-old suspect was in Changyuel and was informed about the situation but did not report to the gewog office. He denied installing live wires around his orchard.

Kabjisa Gup Sonam Dorji expressed deep regrets over the incident, calling it unfortunate, and emphasised that installing live wires was strictly prohibited. He announced plans to notify all 11 gewogs to monitor and educate residents about the dangers of live wire installations.

This incident marks the first reported case in Kabjisa.

The self-employed suspect was summoned to the Punakha police station and his statement was recorded.

He confessed to installing dangerous electric lines around his orchard and an arrest warrant has been requested from the court.

The police also questioned family members of the suspect; no one knew about the installation of the dangerous shocker.

Chencho Dema

Wangdue—The Kazhi Gup, was charged with culpable driving by the Wangdue police after a tragic incident that resulted in the death of a man in his 50s. The incident occurred on June 7 in Phangyul gewog.

Police charged the 37-year-old Gup under Section 66 (1 and 2 (b)) of the Road Safety and Transport Authority Act 1999, which states that a person who culpably drives a motor vehicle and causes the death of another person is guilty of an offence and liable to imprisonment for at least six months or as the Court determines or to a penalty of 50 penalty units or both. Section 2 (b) states that a person culpably drives a motor vehicle if he or she drives the motor vehicle with unjustifiable gross non-observance of a standard of care which a reasonable person would have observed in all the circumstances.

The case was forwarded to the Wangdue court on June 25.

The accused, who was initially detained by Wangdue police, was released on bail on June 9. The deceased was an Extended Support Personnel (ESP) for the Wangdue Dzongkhag.

The Gup  did not have a driver’s license. The incident took place in Phangyul gewog after an irrigation project event.

According to sources, following the celebration, the Gup loaded metal tent poles into the back of his Bolero. While the accused was reversing the vehicle, the poles struck a gate, causing the deceased, who had climbed the gate to remove decorations (Dhar), to fall.

It was reported that the impact from the poles led to the victim’s fatal fall.  The victim was rushed to Wangdue hospital but was pronounced dead on arrival.

Lhakpa Quendren

If you are an aspiring entrepreneur from Zhemgang and neighbouring dzongkhags, a new startup centre in Zhemgang is now available to support you in transforming your innovative ideas into reality.

The centre, established to support startups and small businesses, aims to create job opportunities and stimulate economic growth in the region by fostering a culture of innovation and entrepreneurship within local communities.

The facility, located a few kilometres from the dzongkhag administration, features 20 rooms equipped with conference and training facilities, recreational areas, business development services, incubation spaces, and opportunities for promotion and networking.

Zhemgang startup centre is housed in the former RLDC building

The dzongkhag general service personnel (GSP) and elementary service personnel (ESP), who participated in the Skills for Life program, have started their bakery business. Another space is used by a young artist entrepreneur who promotes ecotourism through paintings.

Zhemgang Dzongda Kesang Jigme said that the initiative is aligned with the 13th Plan for economic development, the private sector, and entrepreneurship. “The government is striving to improve the business ecosystem.”

It is expected to foster networking and collaboration among entrepreneurs, investors, and industry experts to promote sustainable development and prosperity.

Zhemgang’s assistant economic development and marketing officer, Ugyen Zangmo, said the startup centre was aimed at driving long-term economic prosperity and foster innovation. “Moreover, we aspire to engage the community for promoting entrepreneurship as a viable career option and encouraging sustainable business practices.”

“Our vision includes nurturing a thriving ecosystem where local startups not only flourish but also contribute significantly to the regional economy,” she said, adding that this involves creating a supportive environment with tailored incubation programs, mentorship, and access to resources and funding for aspiring entrepreneurs.

 

Plans and way forward

The dzongkhag plans to enhance entrepreneurship at the startup centre by providing robust incubation support through mentorship programs, facilitating access to funding, and offering technical assistance tailored to the needs of startups.

And promote marketing opportunities by organising events and workshops to showcase startup products, enhancing visibility, and attracting potential customers and investors.

The plans include facilitating networking and collaboration through events that connect startups with experts, investors, and local businesses, fostering partnerships and accelerating business success.

Besides, community engagement initiatives and sustainable practices are prioritised to strengthen ties with the local community and promote a culture of entrepreneurship.

The centre, housed in the former Regional Livestock Development Centre (RLDC), is renovated and maintained by the dzongkhag administration with Nu 2.45 million. The Ministry of Industry, Commerce, and Employment supported the equipment and furnishing of the centre with Nu 3 million.

Gelephu Mindfulness City (GMC). What is it, really? Most Bhutanese do not understand this critically important national dream.

GMC is a vision of our prosperity and pride on the global stage. As a nation, Bhutan has consistently led by example, showcasing to the world its commitment to Gross National Happiness (GNH) over GDP, its environmental stewardship, and its unique cultural heritage. Yet, amidst these achievements, we find ourselves at a pivotal juncture that demands profound introspection.

Dreams are important for progress, but they must be anchored in a foundation of practicality and foresight. While GMC represents ambitious goals for our future, the pursuit of economic gains through tourism and hydropower cannot overshadow the pressing realities that require immediate attention.

Tourism promises economic benefits, but we must first address fundamental challenges. Infrastructure, waste management, and cultural preservation are not mere checkboxes but prerequisites for sustainable tourism growth. Without these essentials, our dream risks becoming a mirage, enticing yet unattainable.

Similarly, our hydro projects, once heralded as pillars of economic stability, now pose financial burdens. This predicament demands a shift towards diversified energy sources and enhanced efficiency. Investing in renewable energy alternatives will not only mitigate financial risks but also aligns perfectly with our commitment to environmental sustainability.

At this crossroads, soul-searching transcends mere introspection; it necessitates decisive action. It calls for leadership that prioritises the long-term interests of our people and environment over short-term gains. It demands policies grounded in pragmatism and guided by the principles of GNH—ensuring holistic development that encompasses economic, social, and environmental well-being.

The journey towards GMC must embody Bhutan’s ethos of harmony and balance. It requires collaboration across sectors, harnessing the wisdom of our communities, and integrating traditional knowledge with modern innovation.

By nurturing local expertise and empowering our youth, we cultivate a sustainable future where progress resonates with our cultural heritage.

Transparency and accountability must underpin every facet of GMC’s development. Citizens deserve clarity on the project’s impacts, benefits, and costs. Public participation ensures that GMC evolves as a shared vision, reflecting the aspirations and concerns of all Bhutanese.

GMC symbolises more than infrastructure and economic growth; it embodies our collective ambition to forge a resilient and prosperous future. However, realising this vision demands more than visionary dreams—it requires meticulous planning, inclusive governance, and unwavering commitment to our values.

As we embark on this transformative journey, we must heed the call for deep soul-searching. Understanding GMC is more important. Every Bhutanese should understand the real potential of this national aspiration.

Thukten Zangpo 

The National Council’s Economic Affairs Committee (EAC) made four specific and one general  recommendations during yesterday’s session to strengthen the effectiveness of the 13th Plan.

EAC’s Chairperson Tshewang Rinchen, also an NC member from Samdrupjongkhar, presented the committee’s findings. He said that the 13th Plan aims to elevate Bhutan to a high-income Gross National Happiness economy by 2034, focusing on pillars of people, progress, and prosperity.

However,Tshewang Rinchen noted shortcomings in clarity and details, particularly concerning major economic projects in the 13th Plan except for hydropower and renewable energy.

He added that the committee’s recommendations, which included developing comprehensive plans and allocating resources for key economic sectors such as agriculture, tourism, mining, and manufacturing.

To strengthen local governments, the committee recommended that all vacant positions in local governments be filled by December this year to ensure effective service delivery and regional development.

NC members raised concerns about the allocation of substantial budgets to local governments despite shortages in critical personnel like engineers, accountants, livestock and agriculture officers.

The committee proposed revisiting the resource allocation formula (RAF) to ensure balanced regional development and suggested a common minimum infrastructure framework to address regional disparities.

Tshewang Rinchen said that the 13th Plan’s resource allocation has different criteria for dzongkhags, gewogs, and thromdes with standard deviation metrics.

He added that the government should consider a common minimum infrastructure framework like access to road, electricity, and water, among others.

According to the 13th Plan’s RAF, three criteria are considered for dzongkhags, which is 25 percent weightage for resident population, 10 percent for geographical area, and 65 percent for GNH index (inverse).

For gewogs, six criteria, 20 percent for resident population, 10 percent for geographical area, 25 for percent poverty distribution (headcount), 15 percent each for climate change vulnerability analysis index, GNH index, and transportation index are included.

For thromde, 40 percent weightage is allocated for resident population, 20 percent for geographical area, 10 percent each for poverty distribution (headcount), climate change vulnerability analysis index, GNH index (inverse), and unemployment distribution.

The committee also proposed the importance of timely completion of hydropower projects to manage debt risks and ensure sufficient domestic revenue. NC members also expressed concerns about maintaining adequate international reserves to meet constitutional requirements.

Furthermore, the committee recommended integrating the Nu 15 billion Economic Stimulus Programme (ESP) into the 13th Plan to enhance transparency, accountability, and effective monitoring of its economic impacts.

Members also voiced concerns about access to finance, private sector development, STEM education, and budget allocations for central schools.

While the majority of NC members supported the committee’s recommendations regarding project details for major economic sectors, revisiting RAF, and ESP integration.

However, the House directed the committee to further review its recommendations regarding prioritising human resource allocation for local governments and ensuring timely hydropower project completion.

The House plans to vote on adopting the 13th Plan, incorporating final recommendations and addressing member concerns and submissions by July 1.