Driving Transformational Change
Jitendra Dhital, Administrator, Employees Provident Fund
A chartered accountant by profession, Jitendra Dhital has served in a leadership role at the Employees Provident Fund (EPF) for the past three years. Throughout his 15-year tenure at the EPF, he considers himself fortunate to hold this position, where he has implemented transformative ideas in long-term fund management and provided benefits to contributors.
Born in Gorkha, Dhital completed his I.Sc. at Amrit Science Campus in Kathmandu before pursuing his chartered accountancy degree at the Institute of Chartered Accountants of India. After completing his CA studies in 2007, he returned to Nepal and worked at T.R. Upadhya & Co. for nearly a year before joining the Employees Provident Fund in early 2009. Initially, he was posted as a senior manager in the audit department. He experienced significant doubt about whether to remain at the EPF, frequently contemplating leaving to practice as a chartered accountant or pursue entrepreneurship.
During his studies in India, he completed his articleship (working under a senior CA), a mandatory requirement for the CA degree. His professional journey as a CA began after receiving his licence from the Institute of Chartered Accountants of Nepal (ICAN), subsequently joining the reputable CA firm T.R. Upadhya & Co., which was then a correspondent firm of KPMG. He worked as an audit in-charge, conducting audits of Nabil Bank, Nepal Oil Corporation (NOC), and Asian Paints, among others. His team also conducted Due Diligence Audits (DDA) of Narayani Bikas Bank, a development bank in Birgunj, and National Finance Ltd., for a proposed merger. This DDA took nearly two months and involved travel to the banks’ head offices. During this time, protests in the Terai/Madhesh region intensified, making travel extremely risky. On one occasion, they narrowly escaped a hotel fire in Birgunj amidst the escalating protests, eventually managing to return to Kathmandu from Simara Airport.
While working at T.R. Upadhya & Co., he developed an interest in economics and law, pursuing a Master’s in Economics from Patan Multiple Campus and an LLB from Nepal Law Campus. Equally passionate about IT, he also earned an M.Sc. in IT from Sikkim Manipal University.
After joining the EPF, he was assigned to manage the financial closure and financial management of the Upper Tamakoshi Hydropower Project, financed by the EPF, Rastriya Beema Company, Nepal Electricity Authority, and Citizen Investment Trust (CIT), among others. At the time, discussions were underway to hire foreign individuals for the COO (chief operating officer) and CTO (chief technology officer) positions, but a Nepali national was preferred for the CFO (chief financial officer) role. The 456 MW Upper Tamakoshi was the largest hydropower project financed by domestic financial institutions at that point. Given the challenges the company faced in bidding and other areas, the project’s financing institutions decided to select a CFO from among themselves. Dhital was subsequently deployed as the CFO of the Upper Tamakoshi Project. “I was deployed until the project’s completion; however, I returned to the EPF after establishing certain arrangements,” he explained.
He had no initial preference for government employment, joining the EPF somewhat by chance. He had intended to pursue entrepreneurship, establishing IT-related and other companies with friends. One day, while working at T.R. Upadhya & Co., he saw an EPF vacancy and applied with the thought, “Let’s try it out.” After joining, he felt unsettled in the job and carried a resignation letter in his pocket for nearly three years. Had he not been deployed to the Upper Tamakoshi Hydropower project, he likely would have resigned. However, serving as Tamakoshi’s CFO changed his perspective, revealing the potential of a career at the EPF. He was heavily involved with government entities during the financial closure, as it was a high-priority project. His regular consultations and interactions with high-level bureaucrats and ministers deepened his interest in the work.
After returning to the EPF from the Upper Tamakoshi Hydropower Project, he worked in risk management, investment and other areas. “As a trustee organisation, the EPF carries a huge responsibility – to benefit its contributors and maintain the organisation’s credibility. The EPF has a strong culture of ownership,” he stated.
Managing long-term funds is a considerable challenge. The EPF differs from typical financial institutions. Banks and financial institutions can stop accepting new deposits if investment opportunities are scarce. However, the EPF’s funds grow each year, obligating it to provide certain returns and social security products, necessitating continuous fund mobilisation.
Given the EPF’s nature, it must compete with various institutions. For example, it competes with banks and financial institutions (BFIs) in project financing and with other long-term fund mobilisers for fixed deposits, among other things.
Recognising this highly competitive environment, the EPF provides training and development to its employees. In other countries, governments either raise funds through bonds and similar instruments or provide investment platforms. Singapore, for example, allows investment in housing development through a subsidiary company. Similarly, in India, the government secures a significant portion of funds from long-term fund mobilisers through bonds and other instruments. Bearing all the risks in an unfavourable investment climate is a significant challenge.
As a professional, Dhital observed that such funds should be mobilised for infrastructure development and enhancing the country’s productive capacity. The EPF and other long-term fund mobilisers must play a crucial role in capital formation, moving beyond current practices like retail lending and fixed deposits. He believes the government should seriously consider this and introduce policies to utilise these funds for national development.
The EPF Act allows it to own and operate housing projects, and some small-scale projects have been developed in Pokhara, with groundwork underway for a similar project in Chitwan. Given its fund size, the EPF has the capacity for large-scale township development projects.
Currently, the EPF manages approximately Rs 600 billion, including reserves. In recent years, following the establishment of the Social Security Fund, the EPF has not actively sought to bring private sector employees into its fold.
The EPF has, to date, provided the largest funding among financial institutions, with a Rs 75 billion portfolio in the energy sector. “There is a lack of projects with credible studies,” he remarked. “The scarcity of credible and bankable projects hinders the EPF from financing projects across various fields.”
Previously, the EPF proposed a project to develop housing for civil servants, with rent deducted from their savings. Although discussed at the highest political levels, the EPF did not receive approval and the project was stalled. “If the government provides land, we can develop low-cost housing on a large scale,” according to Dhital.
As an administrator, Dhital has emphasised transparency, staff capacity development, a competitive environment, and technology adaptation. The EPF has received the BPA award for two or three years and a governance award as a pioneer in NFRS implementation. The EPF Act stipulates that only the contributor can make a claim. The EPF encourages and provides specific training to its employees to build competitiveness. Interdepartmental training, knowledge sharing, and executive forums are conducted. Manager groups are encouraged to work on new concepts in product design, innovation and human resource management. The EPF emphasises technology adaptation and minimising staffing needs through operations and maintenance (O&M). Among contemporary organisations, its IT system and technology-driven service delivery are robust, according to Dhital. “The government relies on the EPF to launch any scheme,” he states. The EPF is a pioneer in providing data to the Nagarik App and CGATs system, among others, and fully implemented work-from-home during the Covid-19 pandemic. The EPF has been extensively implementing the concept of a faceless and paperless EPF for the past year and a half.
The EPF is considering expanding social security scheme coverage to contributors and their spouses, while simultaneously launching at least two new products. “Our primary objective is to provide optimum benefits to contributors. Extending coverage to their spouses and families would substantially increase the number of indirect beneficiaries,” Dhital remarked. The EPF has over 700,000 contributors.
Multiple non-banking financial institutions operate in the social security domain, and their operating laws are duplicated, requiring clarification. To address this, the government has announced its intention to clarify the objectives and domains of government policies and programmes in the Fiscal Year 2024/25. Furthermore, the government is considering an umbrella act for social security institutions, and the EPF has been frequently consulted on this matter. The government is also working towards establishing a governing body. If this occurs, various social security organisations will be represented. Currently, non-contributory social security organisations exist, and for their sustainability, they must transition to contributory models.
While ideally the entire population should be covered by social security, the focus is currently on the working-age population, which can be categorised into various groups: private sector, public sector, seasonal workers and migrant workers. It is essential to legally define which institution should operate in each specific domain. “For example, the nature and expectations of government employees and migrant workers differ,” he explained. “Given the various institutions working in social security, it would be beneficial to define their roles through legislative amendments.”
Dhital believes that, due to its over 60-year history, the EPF will continue to play a prominent role in this area. The EPF has already established offices in line with the federal structure, including liaison offices, focusing on service delivery and bringing provincial and local government employees into the social security system. By resolving existing complexities, these employees will have the opportunity to join the social security net.
Retiring in three years, Dhital is passionate about working within the norms and structure of social security fund management. He is consulting literature and conducting research to contribute to the nation by finding ways to effectively mobilise long-term funds for national development.
