Kathmandu, Jan. 8
President Bidya Devi Bhandari said on
Sunday that a greater collaboration among the government, private sector and
banking industry was needed to produce skilled human resources and promote
domestic production and create employment.
“There is a lot to do in the area of
entrepreneurship development and job creation. So all stakeholders should come
together,” she said while addressing the inaugural session of the third Annual
General Meeting of Confederation of Bank and Financial Institutions in Nepal
(CBFIN) at Sheetal Niwas.
President Bhandari suggested the
government to put its efforts for policy reforms so that entrepreneurship and
employment could be promoted. “For this, universities should be roped in.
Likewise the banks and financial institutions (BFIs) should develop pragmatic plan
for the same,” she said.
Speaking at the programme, Governor of the
Nepal Rastra Bank (NRB), Maha Prasad Adhikari, said that if Nepal succeeds to
check the impact of global economic slow-down in the external sector and
construction industry in the country, it would be the achievement for this year.
He said that it would be successful for
Nepal to avoid the effects of the economic recession that may occur all over
the world.
“Stability in price, external sector and
financial sector are the greatest challenges for the country’s sustainable
economic development and macroeconomic stability,” said Governor Adhikari.
Former finance minister and governor of
the central bank, Dr. Yuba Raj Khatiwada, said that the banking sector has
witness a revolutionary changes over the past one and a half decades with the
adoption of technology, merger process and expansion of services.
The CBFIN has honoured Dr. Khatiwada at
the programme for his contribution to the economic growth, banking sector development
and planning as the finance minister, governor of the NRB, vice-chairman of the
National Planning Commission and ambassador of Nepal to the United States of
America.
Dr. Khatiwada said that Nepal has
reached the 23rd position among 140 countries in terms of total
capitalisation. "It is necessary to increase the quality rather than the
size of the loan. Increasing the size may bring risks,” he said.
Pawan Golyan, President of CBFIN, said
that it is just an illusion to say that banks have made excessive profits by
charging high interest rates to borrowers. According to him, even though banks
have contributed a lot to development and prosperity, they have not been
properly evaluated.
"Currently, keeping money in fixed
deposits earns 12-13 per cent annual interest rate and in the last financial
year, the rate of return of BFIs was around the same number. Therefore, there
is no truth in saying that the BFIs earned more," he said.
Golyan said that the increase in
non-performing loans has put pressure on the capital ratio. The non-performing
loans has increased from 1.31 percent in June 2022 to 1.98 per cent in October
2022, and it is likely to increase further in December.
He suggested to continue the refinancing
facility for one more year and keep interest rate of fix deposits below the
inflation rate.
Published in The Rising Nepal daily on 9 January 2023.
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