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No new loans to industries
BIRATNAGAR, APR 01 -
Commercial banks in Biratnagar have given up lending to industries citing the lack of liquidity that has badly affected the industries here. There is a presence of two dozens commercial banks in Biratnagar.
The banks had lent Rs. 15 billion in Sunsari-Morang industrial corridor the last fiscal year, according to Nepal Rastra Bank (NRB). "The factories are finding it hard to get loans for the industries," said industrialist Moti Dugar and constituent assembly member. "We will be compelled to shut down factories if the situation does not improve."
The business community has also been complaining about the rising interest rates on lending. A delegation of the Federation of Nepalese Chamber of Commerce and Industry (FNCCI) also raised this issue during their meeting with Prime Minister Madhav Kumar Nepal on Tuesday.
Mahesh Jaju, president of Morang Trade Association said that business activities were declining in eastern Nepal as a result of banks' inability to lend. "The business activities remain dependent on resources available from the banks for most of their transactions."
NIC Bank has not made any new lending for the last two months. It has been lending 70 percent of its total loans to the business sector. "We have been unable to provide new loans although there is a huge pressure on us," said Sudhir Agrawal, manager of NIC Bank here. NIC has made lending of Rs. 2 billion for industrial and trading activities here.
Another industrialist Nawal Kishor Kawara said, on one hand, they were not getting loans, on the other hand, the interest rates of old loans have gone up significantly. The interest rate on lending has gone up to 13 percent from about 10 percent three months ago.
Director of NIC Bank Tulasi Ram Agrawal said no bank is making new lending in the absence of liquidity. "All banks are focusing on recovery of old loans by stopping the new loans."
Posted on: 2010-04-02 07:38
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