Loan extension could not take place due to lack of investment security: Analraj Bhattarai

लगानी न्यूज

२२ जेष्ठ २०८३, शुक्रबार १८:१३June 5, 2026

. Former banker Analraj Bhattarai recalled that the private sector had said a few years ago that they would expand their investment if the interest rate was in single digits.

Speaking at a pre-Monetary Policy Pre-discussion programme organized by Nepal Management Association (MAN) here today, Finance Minister Khatiwada said the private sector was not encouraged to take loan for lack of security of investment.TAG_OPEN_div_18 According to him, although most of the banks have sufficient liquidity, the demand for loans has not increased as expected.

Bhattarai said that 15-TAG_OPEN_div_16 16 out of 20 banks are in a position to extend loans and the average capital adequacy ratio is above the regulatory limit. According to him, although the provisioning period of bad loans in India is three years, banks are under pressure as they have to settle in Nepal within a year.

He suggested that the NRB should bring a policy focused on how to make effective use of surplus liquidity rather than pulling it from the market.TAG_OPEN_div_14 Stating that the NPAs have reached above 5 percent and the share of direct lending in them is more than 60 percent, he said that the regulator should pay special attention to this issue.

Former executive director of Nepal Rastra Bank, Nar Bahadur Thapa, said that the pressure on the capital fund was increasing in the banking sector and this should be addressed through the monetary policy.TAG_OPEN_div_12

} He also suggested that expanding financial access should be given priority in the monetary policy. Stating that financial access of the country is limited to around 60 per cent at present, he called for special initiatives to increase it.