This news report details the recent discussion held between Finance Minister Wagle and the Chief Executive Officers of twenty commercial banks regarding economic expansion and budget implementation.
During a Tuesday meeting organized by the Finance Ministry with commercial bank CEOs, Finance Minister Wagle stressed the importance of government and banks working together to achieve economic growth and expansion. The discussion focused on implementing the new budget and the current state of the financial market.
Minister Wagle explained that the ministry arranged the meeting to understand banks’ problems, initiate government actions for solutions, and foster collaboration to meet the broader goal of economic growth. He urged bankers to openly share their issues, assuring them that the government will honestly work towards resolving these concerns.
“We has changed the course of economic governance to expand the economy,” Finance Minister Wagle told the bankers. “Our target is to make the economy 74 kharba in size. For this, we need to increase investment and create jobs. How can you help and contribute? Tell us what the government also needs to do.” He also questioned why banks were unable to expand credit.
“What problems are banks facing in credit expansion? If the government needs to do something, please let us know. We will facilitate it,” Minister Wagle assured. He asked bankers to collectively present their policy and practical difficulties to the ministry, promising to find solutions.
Speaking at the meeting, the Chief Executive Officers of the banks clarified that rumors about a lack of investment environment were not true. They mentioned that some older regulatory treatments were naturally creating a difficult situation for the banking sector, but these issues are solvable.
Bankers noted strong competition for investment in the hydropower sector and signs of slowly increasing demand in other areas. They suggested that the government and Nepal Rastra Bank should implement some immediate facilitative measures to energize the economy. Santosh Koirala, CEO of Machhapuchhre Bank and also the President of the Nepal Bankers Association, specifically highlighted the need for more support to ease investment in hydropower.
Koirala also advised the government to work towards timely completion of large projects and to gain the trust of both small and large businesses. Ganesh Pokharel, CEO of Citizens International Bank, described the current slowdown in the banking sector as a normal and cyclical phenomenon.
“There is a strong demand for investment in hydropower. The situation is not as weak as it appears from outside. This is a cycle,” Ganesh Pokharel of Citizens International Bank emphasized again.
Surendra Regmi, CEO of Global IME Bank, requested that the government address the declining business confidence in the market.
He suggested that Nepal Rastra Bank should make policy changes to help banks increase their lending capacity. Regmi also expressed confidence that the non-banking asset management company, which the government planned to establish, will be launched soon. Sudesh Khaling, CEO of Everest Bank, stressed the need to expand credit to rural and underprivileged groups. He also called for increased government capital expenditure and improved capacity of government offices to stimulate the economy.
Ashok Rana, CEO of Himalayan Bank, shared that industrialists and businesspeople are keen to invest in the new fiscal year. “Industrialists and businesspeople has started asking if their limits will be crossed for the new year, this is a good sign,” he quoted. Sujit Shakya, CEO of NIC Asia Bank, mentioned that policy arrangements are needed to resolve issues related to loans provided to small businesses during the Covid period.
Shakya added that there is a need to review and amend the rules for blacklisting borrowers and loan provisioning by examining best practices in neighboring countries.
“100 percent provisioning within one year is like strangling the business,” he further stated.
Gorakhshamsher Rana of Standard Chartered Bank suggested that the working capital loan limit could be reviewed. Rameshwar Bashyal, CEO of Siddhartha Bank, pointed out that both external and internal factors lead to economic contraction, which is impacting the quality of loans. He also urged for a review of the policy that requires 100 percent loan provisioning within a year.
Ramkumar Tiwari, CEO of Nepal SBI Bank, compared the economies of Nepal and India, proposing that the government should invest in large infrastructure projects for economic development and expansion.
Jyotiprakash Pandey of Nepal Investment Mega Bank observed that demand in the food and construction sectors is likely to grow soon, similar to hydropower. He also highlighted that banks forced into mergers are currently facing challenges in expanding their investments. Pandey mentioned that banks are suffering from problems of unpaid loans and expects government support in this regard.
Ajay Shah, CEO of Laxmi Bank, called for increasing investment in Small and Medium Enterprises (SMEs). He also appealed to the government not to intimidate banks and businesses, but to work with them based on trust. He further stated that the economy is slow due to investments stuck in the real estate sector.
Sanjeev Manandhar, CEO of Prime Commercial Bank, expressed that recent actions against the banking and business sectors have lowered morale.
Manoj Gyawali, CEO of Nabil Bank, advocated for a change in the policy concerning provisioning for bad loans. He explained that many people are on the blacklist for both bounced checks and loan defaults, indicating proper solution is not in place for this issue.
Tilak Pandey, CEO of Nepal Bank, highlighted that banks are weighed down by non-banking assets and effective measures are urgently needed to address this situation.
AI Disclaimer: This article was originally published on https://bajarkochirfar.com. It has been translated with the help of AI. For the best understanding and accurate facts, we recommend reading the original Nepali version.
