Banks won’t be allowed to be profit-oriented: FM Khatiwada

Kathmandu, Apr 17

Finance Minister Dr. Yuba Raj Khatiwada has said that the banking sector would not be allowed to be profit-oriented during the lockdown and the industries and businesses would be saved from the crisis.

He assured the business community that the government would coordinate with the banks and financial institutions in reducing the cost of loan and with the Nepal Rastra Bank about bringing down the interest rates in order to prevent the business from collapsing.

“We are loosening the process to obtain loan from the external sectors so that the banks would have sufficient liquidity and the investment wouldn’t shrink,” he said while accepting the recommendations of the Confederation of Nepalese Industries (CNI) on the strategies to be adopted to save the economy from the impact of the COVID-19 pandemic on Thursday.

FM Dr. Khatiwada, who also holds the portfolio of Minister for Information and Communication Technology, said that he was aware that the banks might face liquidity crunch with the money being pulled to the government funds for the relief and other purposes during the crisis.

According to him, the government was positive about pulling the money from the private sector and unspent budget of the local bodies to the banking system.

The International Monetary Fund, World Bank, Asian Development Bank and Asian Infrastructure Investment Bank have assured the government to provide enough support for the additional expenditure in the economic and health sectors. “It will also help in maintaining the liquidity in the banking system. However, there is a challenge to mobilise and spend the foreign support,” he said.

The CNI has drawn the attention of the minister that the prolonged lockdown might hit some industries and businesses hard and they might not be able to pay the salary and wages to their employees. It urged that the government should rethink about the money being sent to the Social Security Fund.

FM Dr. Khatiwada said that he was positive to discuss the issue with the entrepreneurs.

 “The government is working on economic, monetary and administrative methods to rehabilitate the business and mobilise the economy during the coronavirus crisis and prolonged lockdown,” he said.

He said that the government was working with the private sector in expanding the short-term relief facilities to the business sector.

A CNI delegation led by its President Satish Kumar More met Dr. Khatiwada the other day to submit its recommendations about the economic revival during and after the coronavirus pandemic.

It suggested unveiling monetary and relief package and economic policy interventions to revive the business.

The business body had asked the government to spend money equal to 3 per cent of the Gross Domestic Product for the informal sector workers, poor and marginalised people.

Likewise, it recommended shifting the payment of all bank loan and interest to the end of the fiscal year, June 14.

Published in The Rising Nepal daily on 18 April 2020.