Governor asks BFIs to make precautions against risky loans

 Kathmandu, Mar. 31

Governor of the Nepal Rastra Bank, Maha Prasad Adhikari, has said that banks and financial institutions should take precautions against risky loans and proceed with necessary actions.

In a meeting with a delegation of the Confederation of Banks and Financial Institutions Nepal (CIBFIN) on Friday at his office in Baluwatar, Adhikari stated that some of the problems currently seen in the banking sector are related to the system, and suggested that emphasis should be placed on systemic structural reforms, according to the CBFIN.

"In view of the current dire situation, he stressed that all the concerned parties should work seriously to make the economy dynamic by normalising the livelihood and businesses," the CBFIN quoted Governor Adhikari in a statement.

He said that the central bank is closely monitoring the activities being carried out against banks and financial institutions and employees, and that he was also concerned about the security sensitivities in the banking sector.

In the context that the government of Nepal has defined the banking service as an essential service sector and published it in the gazette, Adhikari also said that necessary facilitation is being done to the relevant agencies to create an environment in which this sector could operate safely with required security.

The governor also said that the corporate sector should also initiate process to issue long-term bonds.

President of CBFIN, Pawan Kumar Golyan, said that there was a need for reducing the interest rate in the current adverse situation. 

Published in The Rising Nepal daily on 1 April 2023.