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‘Nepali financial sector lacks banking culture’
KATHMANDU, JAN 18 - Experts today pointed out the lack of banking culture in the country’s financial sector despite overwhelming rise in the number of commercial banks after adopting liberal financial policy in mid-eighties.
They also said that as Nepal Rastra Bank (NRB) has failed to monitor and inspect to the commercial banks properly, development of professionalism both in the banks and among customers has been far less than international standard.
Speaking at an interaction program organized here by the Former Employees’ Association (FEA) of NRB, the speakers stressed on the need to soften the parameter of the blacklisting procedures of the central bank to NRB. They were also of the view that the tough blacklisting parameters have hindered the loan disbursement of the commercial banks, thereby creating obstacles in the way to economic prosperity.
Dr Madan Kumar Dahal, Professor at the Tribhuvan University said that at a time when the country is facing a politically fragile situation and economy is passing through tough challenges, the tough blacklisting procedures have discouraged aspirant investors.
However, he also stressed that the banking sector should also take positive steps to encourage investment in the economy. "Banks should lower the lending interest rates and encourage the investors to give a boost to the sluggish economic activities of the country," he said.
He also underlined that the central bank should take due attention over the possible measures to rescue the economy from the recession while formulating any policy or issuing directives.
Speaking on the occasion, Dr Pushpa Raj Rajkarnikar, President of FEA underlined the need to make the loan information center of the NRB more effective so as to ensure the flow of quality loans.
He said that the second phase of financial liberilisation invited anomalies in the banking sector, thereby promoting the unhealthy competitions among the commercial banks and resulting the rise of non-performing assets. "Of the total loan disbursed by the commercial banks, around 20 percent is non-performing," he informed.
Likewise, Laxmi Bahadur Shrestha, Coordinator of Banking Sub-committee of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said that the policy of the NRB to publish the list of the blacklisted and defaulters is no way pragmatic.
"While giving any directives, the central bank should pay due attention to the practical problems that emerges during the implementation of the directives," he stressed.
Arjun Pandey of the Rastriya Banijaya Bank, however, expressed the views that the blacklisting is not the interest of the banks, but an obligation. Posted on: 2004-01-19 03:47
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