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Governor of Nepal Rastra Bank Vishwanath Paudel has said that there is a problem in banks and financial institutions due to the increase in bad loans in priority sectors such as agriculture and small and medium enterprises.
He says that this problem will not be solved if the monetary system is introduced only by looking at big entrepreneurs and businessmen. In the pre-monetary policy discussion program organized by Nepal Economic Journalists Society (SEJAN) here today, Governor Paudel said that preparations are being made to bring the monetary policy for the next financial year 2082/83 by focusing on the problems of agriculture and small and medium industries and taking all other sectors together.
'We want to have more loans, bad loans have increased in agriculture and small and medium enterprise sector, we should focus more on how to solve this problem 'Governor Paudel said, 'All sectors are affected during times of instability, that's why we want to take everyone as far as possible, we have to be careful not to create one group of rich people and another group of farmers and small entrepreneurs, everyone should have the right to credit, everyone should have access to it.'
Similarly, he says that solving the problems seen in the country's overall economy and financial sector is not only in the hands of the National Bank. In order to solve the current problem, he emphasized that it is essential to expand investment in large infrastructure sectors such as energy, roads, and bridges by leading the financial policy.
Stating that he is clear that there is a need for coordination between financial policy and monetary policy, Governor Paudel recently said that the monetary policy should be focused on micro-indicator management rather than the balance sheet of banks and financial institutions.
Rajesh Upadhyay, senior vice-president of Confederation of Banks and Financial Institutions Nepal (CIBIFIN), said that the main reason for the lack of credit growth despite low interest rates is the decrease in disposable income. "Our expenses have increased, but the income has not increased, consumption in the consumer market has decreased due to youth migration," said Upadhyay.
He argues that even though the working capital loan guidance is necessary, it has not come at the right time. He also said that the provisions of the law related to debt recovery are strict and it should be relaxed.
