CPN MP Parashuram Tamang has questioned the Securities Board of Nepal regarding the sluggishness in both the banking sector and the capital market despite having high liquidity.
During a meeting of Finance Committee under House of Representatives on Wednesday, Nepal Communist Party (CPN) lawmaker Parashuram Tamang raised questions on why both banking sector and capital market is slow even when there is enough liquidity in the system.
Issues in Banking and Stock Market Relationship
Speaking to newly appointed chairman of Securities Board of Nepal (SEBON), MP Tamang asked him to clarify real reason why relationship between banks and capital market is not working as expected. He mentioned that although there is a huge amount of liquidity piled up in the banking system, its positive impact is neither seen in bank’s loan expansion nor in capital market.
“Why is relationship between bank and capital market not matching? Right now there is so much liquidity, but this side is not working, and that side is also not working. What is the mystery behind this? At least one side should have run, either bank should have run or securities market should have run. But in our case, both are not running,” he said.
Need for Investor Confidence and Trust
Tamang pointed out that in the past, many investors and company promoters connected with banks and capital market became unsuccessful. He said the board must present a clear view on what is the biggest challenge right now.
He also asked for board’s opinion on the ratio of successful and unsuccessful investors, level of risk, and strategies to make market safe and trustworthy for long term.
On the topic of bringing foreign investment, he emphasized on building an environment of success and trust. He said that we talk about increasing participation of foreign investors, but if there are fewer chances of success and more examples of failures, why will they come. Therefore, he added that basis for increasing trust towards market must be clear.
At the end, lawmaker Tamang requested SEBON to bring out a clear work plan to restore investor trust in the market, reduce risks, and maintain effective coordination between banking sector and capital market.
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.
