By Choekyi Lhamo
DHARAMSHALA, Sept. 7: The future of Gang-Jong Development Finance Private Ltd. may finally see some clarity as the review committee submitted their report on Monday to Speaker Khenpo Sonam Tenphel and Deputy Speaker Dolma Tsering ahead of the parliamentary session that began on Wednesday.
In the last parliamentary session in March, the project was a hotly debated issue leading to the formation of a committee consisting five members to assess the condition, risk and future scope on June 2. The committee submitted 19 related files including an expert’s report, transcriptions of interviews with concerned staff and officials, among others. The committee members consist of MP Dawa Phunkyi, MP Serta Tsultrim, MP Kunchok Yarphel, MP Karma Gelek and financial expert Rahul Joshi. The future relevance of the initiative, which was first established as a for-profit enterprise, will be deliberated in this session with the committee submitting their report.
In March, CTA President Penpa Tsering said that he had no confidence in the project due to its limited funds, legal barriers in receiving funds among others. “I have clearly told the shareholders that we cannot guarantee the return of even their base investment in a few years as things stand now. I do not have the courage to ask others to jump when I can see a cliff ahead. I will put effort but only if there is hope,” Penpa Tsering said while fending off queries from MPs who questioned the resolve of the current Kashag in continuing a project started by his predecessor.
According to the CTA-run website, Gang Jong Private Limited was registered on 28 Nov in 2017 as a for-profit enterprise and received a Certificate of Registration (CoR) from the RBI on 13 December 2018 as a Non-Banking Finance Company (Non-Deposit Taking). The initiative’s objective, to create a Tibetan banking system for the financial sustainability and self-reliance of Tibetans in exile, many say, is well intentioned and ambitious but is fraught with technical obstacles and unclear road-map.
Despite obtaining a license for NBFC (Non-Banking Financial Company) from the Reserve Bank of India (RBI), the company does not have an operational channel to receive funds from major contributors such as the US government and is a long way off the mark to raise 200 crore INR, the minimum capital mandated by RBI to begin operating as a bank.
5 Responses
Grossly mismanaged and poorly conceived project with no follow through. Loose ends galore. Lack of basic financial expertise in managment and staff, and absolutely no clear project planning. Very akin to any other poorly executed CTA ventures of the past, let’s wing it and hope it sticks.
Alas, what a missed oppotunity!
1. There’s no viable source for capital. LS argued that Tibetans in the West who invest in Gangjong can reap higher returns than western banks. But the higher bank interest in India is offset by the equally high rate of depreciation of the rupee. Anyway most Tibetans are scrounging every dollar to buy their house, how many have the excess cash for investment.
2. The next ploy was to ask for a part of the US Aid budget to capitalise the venture. But aid funds cannot be channelled to a for-profit venture. Some LS cronies in the parliament suggested that HH should request the Indian gov for a respite. Imagine their gall asking the HH to soil his name to make an illegal request for this petty matter just to save LS’s face.
3. As a regular NBFC, Gangjong cannot refuse if an Indian comes to ask for a loan tomorrow. Is that a wise use of our meagre refugee administration funds. Also if some local Indian with political clout or criminal connection refuses to repay, what are our means of recouping the debt, does CTA want to get into a messy potentially incendiary legal suit.
I agree with your sentiments but take exception to your last remark. Could you please name any other CTA project that couldn’t even get off the ground because its very premiss was unfeasible. The failure of a business is one thing, but launching an utterly unfeasible plan is ineptitude of the grossest kind. You can have a child and raise it well or badly, but to announce your parenthood with a stillborn is just madness.
False equivalences are equally dangerous as outright defences.
LS didn’t even confer with the parliament when greenlighting this project and spending thousands of dollars on fancy foreign consultancies with zero knowledge of Indian laws. And these parliamentarians who’re busy heckling the current sikyong for every word didn’t raise a squeak then. If I were in the CTA, I would first launch a suit against Dallberg and ask them to return the reported $250000 fee for their shoddy research and asinine advice (will also satiate my passionate hate for finance MBAs). But I wouldn’t touch the parliamentarians with a barge pole because just looking at their faces gives me a brain aneurysm.
If Penpa Tsering does have have the the risk taking capability for setting up even a small bank, I don’t know how he has the risk capacity for negotiation with the Chinese government. Looks like Penpa Tsering does not have a long term goal of securing financial independence from donors and outside influence.
Our usual US Aid budget to Tibetan government was to finance this so-called Gangjong bank, so where’s your financial independence from donors. There’s no other investment stream other than these US aid funds. As it stands the project is utterly impracticable because donor funds cannot be channelled to capitalise a for-profit finance. This is just a shockingly ill-planned vanity project all fluffed up with rhetoric of self-reliance but with zero feasibility, and it has already cost the Tibetan government a tidy sum, just look at the the jaw-dropping fees that a fancy foreign consultancy took for this project.
That was a well thought out and non biased opinion from someone who evidently knows what they’re talking about. All in all, this project is costing more than what it takes in.
Anything cooked up in haste be it because of their haughtiness or arrogance ignoring experts opinion won’t go a long way. But we ‘ll know it once we hear what the liquid sum is .Thanks.