Kathmandu. Nepal Rastra Bank (NRB) has prepared a draft of the Asset Management Act for the establishment of asset management company.

In its monetary policy for the current fiscal year, the NRB had stated that a draft of the Asset Management Act would be prepared and submitted to the Government of Nepal for the purpose of establishing asset management companies to manage the non-performing assets and non-banking assets of banks and financial institutions. According to this provision, the Rastra Bank has prepared the draft of the Act.

NRB spokesperson Kiran Pandit said that the draft of the act has been prepared as per the provisions of the monetary policy. “The Rastra Bank has prepared the draft,” he said, adding, “The draft will be presented in the board meeting of the Rastra Bank.” After the approval of the Board, it will be sent to the Government of Nepal for implementation. ’

There is no demand to set up the company now. This has been a demand for almost a decade ago. The demand of bankers and the private sector for a decade has now reached the stage of being fulfilled. Such companies used to be more in the bank when the non-performing loans were high.

For the last 10 years, the government has been envisioning the company from its policies and programs to monetary policy. The government has also stated in the policy and program of the upcoming fiscal year that it will establish asset management companies from the government level to manage the non-banking assets of banks and financial institutions.

Although the government has said in the policy and program of the upcoming fiscal year that the company will be established, the Rastra Bank has prepared a draft act for this purpose. If the government looks at this issue with concern, then the way for the establishment of the company in the next fiscal year is going to be opened. The asset management company is not only the desire of the Rastra Bank and the government, but also the demand of the policy sector. The policy sector has also been saying that it is too late to bring the property management company into operation.

Some policy sectors have also demanded the implementation of asset management companies while giving suggestions for the monetary policy for the next fiscal year. Morang: The Morang Chamber of Commerce and Industry has demanded a 18-point suggestion to the Rastra Bank for the monetary policy for the upcoming fiscal year.

“Nepal Rastra Bank (NRB) has required asset management companies to provide an opportunity to restart the projects in the form of bad loans by giving them various options and although its provision has been made in the monetary policy in the past, it has not been implemented due to lack of legislation. ’

The association has made this suggestion for the monetary policy for the upcoming fiscal year. The bankers’ association has been giving this suggestion since the fiscal year 2077÷78 BS. In course of giving suggestions to the Rastra Bank for monetary policy, the government had demanded the opening of an asset management company. That demand is now in the process of being met. The Rastra Bank has not yet prepared the draft of the act. It is likely to be implemented in the next financial year.

Demand for asset management companies in Nepal was indicated to increase in non-performing loans in the banking sector after the earthquake of 2072. At that time, non-performing loans did not increase due to the increase in demand for loans. The bank’s non-performing loans did not increase relatively, so it was discussed at that time.

After the establishment of such a company, the bank is envisaged to hold non-banking assets that could not be auctioned or sold. In recent times, non-performing loans in banks and financial institutions have been more than 5 percent on average. Some banks have more than 7 percent of such loans. At present, the bank has a lot of difficulty in managing non-banking and reducing non-performing loans.

Now the recovery of loans to the bank is becoming a very complicated issue. If there was a company now, banks would be able to sell assets that could not be sold. The company can sell the assets that the bank has not been able to sell by adding value. Property, including real estate that has not been auctioned, can also be sold through this process. The bank does not have unnecessary assets. It is said that it can be converted into cash in time.