. The banking sector is the backbone of any economy. In a developing country like Nepal, the role of the banking sector was, is and will remain very important for economic and social transformation. The banking sector is not only acting as a financial intermediary, it has also contributed significantly to the transformation of the society as a whole.
The banking sector is a very sensitive sector.TAG_OPEN_div_32 It is believed that the news, information and adjectives related to banking will be presented on the basis of facts, evidence and proper verification as the news, information and adjectives related to this will have a direct impact on public trust, depositors’ psychology and overall financial stability.
Nepal’TAG_OPEN_em_18 s banking sector is going through a very sensitive and challenging situation. On the one hand, there is enough liquidity in the banking system, interest rates have come down, banks are ready to invest, but on the other hand, credit expansion has not increased as expected. This raises a serious question whether the problem is liquidity or confidence.
} In our understanding, Nepal’s economy is more affected by the crisis of confidence than by the liquidity crisis. There is no enthusiasm in the private sector to expand investment. It is clear that the entire private sector, which is in a wait-and-see state, is still silent. The demand for credit in the industrial and commercial sector has been weak for some time. The government’s capital expenditure has not been as expected. There has been a slowdown in economic activity. This has had a direct impact on the banking sector.
TAG_OPEN_div_26 The recent arrest of a CEO has deeply alarmed the entire banking sector. The BAFIA Safe Transactions Act clearly states that the borrower has the first right over the property given to the bank for security after the bank gives the loan. We believe that the investigation process should proceed independently on every issue and we have no objection to that. But the line between professional judgment and bad intentions needs to be clear.
If a selfless professional decision made with good intentions is also seen from the point of view of personal criminal in the future, then it is necessary to be serious about the possibility of creating an atmosphere of extreme confusion in the banking sector. This could have a direct impact on credit flow, investment confidence, and ultimately the overall economy. We are not against accountability. But we believe that along with accountability, institutional trust is equally important. Banking is an inherently risk-based business. It is an eternal truth that not every loan disbursed is good and successful, nor is the flow of every business always the same. In this sense, it would not be fair to blame the banks alone for the failure and economic slowdown in the credit and business cycle.
The purpose of today’s event is not just to advocate for the banks.TAG_OPEN_div_22 We’re open. We want a fact-based and constructive dialogue. Economic journalism plays a very important role in the formulation of policy discourse. We believe that your feedback, criticism, analysis and suggestions will make the policy debate more mature. What Nepal needs most today is to restore self-confidence. Confidence, investment confidence, and policy confidence, confidence in the future.
Thoughts of Prachanda Bahadur Shrestha, President of CIFIN{
प्रतिक्रिया दिनुहोस्