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Rashtra Bank Governor Vishwanath Paudel has said that since the loans provided by banks and financial institutions are only available to a limited number of people, it is imperative to decentralize them.
He said that even though the branches of banks and financial institutions have reached all local levels, access to credit is still limited, so the structure should be modified to create an environment where more citizens can access credit.
Governor Paudel said in the meeting of the Federal Parliament's Economic Committee on Monday that credit expansion by banks and financial institutions is becoming centralized and a large part of the total disbursed credit goes to limited individuals and groups.
Governor Poudel said during the discussion on the bill to amend the Bank and Financial Institutions Act, 2073 (Bafia), that there are about 1940,000 borrowers, out of which only 0.01 percent of the borrowers have used 3.9 percent of the loan. It is a matter of interest whether it is good or not to give more loans to limited people and whether or not the loans that flow in such a way have improved production. Bafia, which is undergoing
revision, is trying to distinguish between the directors and businessmen of banks and financial institutions, and who is trying to distinguish between those who have significant ownership and those associated with banks, said Governor Paudel. He said that he believes that it will be clear through the bill that the directors can and cannot take loans.
Executive Director of Nepal Rastra Bank Guruprasad Paudel said that the present amendment is necessary because the existing Bafia does not cover digital banking. Now about He informed that around 55 and a half billion loans have been disbursed.
In the bill that is being amended, the use of digital currency and digital banking are given legal recognition, seeking clarity on the responsibilities of people on the board of directors of banks, and discouraging the trend of taking large loans from banks that have shareholders themselves.
