Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) is preparing to submit a draft of the Asset Management Company (ASM) Act to the Board of Directors.

The draft was prepared by officials from the Nepal Rastra Bank, the Ministry of Finance and the Ministry of Law. NRB Spokesperson Guru Prasad Poudel said that the draft of the act is ready.

The draft will now be sent to the NRB’s board of directors. After the approval of the Board of Directors of Nepal Rastra Bank, it will be sent to the Ministry of Finance. The Ministry of Finance will send it to the Ministry of Law for legal opinion. The law ministry sends it to the parliament. The House sends the bill to the parliamentary committee for discussion. The committee sends it to the full parliament with its recommendations. After the endorsement of the Act, the concerned body will implement it.

The Act was to be implemented from the next fiscal year. After the Jenji agitation on September 23 and 24, the government and the parliament were dissolved. The government formed after the Jenji movement has announced elections on March 21.

There is still uncertainty about whether the elections will be held on the date fixed by the government. Therefore, there is confusion whether this Act will be implemented from the next fiscal year or not.

In the Monetary Policy last fiscal year, the NRB had made a provision that a draft of the Wealth Management Act would be prepared for the purpose of establishing an asset management company for the management of non-performing assets and non-banking assets of banks and financial institutions and would be submitted to the government. According to this provision, the NRB has already prepared the draft of the Act.

The NRB has prepared the draft of the Act as per the provisions of the Monetary Policy. The demand for setting up a company is not new. There was a demand for this for about a decade. The banking and private sector had been demanding this for a decade.

Over the course of nearly a decade, the government has conceived it several times. However, it could not be implemented. Now, at a time when expectations are rising for implementation, it is said that the dissolution of parliament due to the Genji movement will be pushed a little farther away.

The government’s policy and program for the current fiscal year has also mentioned that an asset management company will be established at the government level to manage the non-banking assets of banks and financial institutions.

The private sector has been saying that it has been delayed to bring the property management company into operation.

The private sector organizations have been demanding that the Asset Management Company be required by the Nepal Rastra Bank to provide an opportunity to restart the projects which are considered bad loans by giving them various options and although this provision was included in the Monetary Policy in the past, the law has not been implemented as it has not been implemented.

The demand for property management companies in Nepal increased after the earthquake of 2072. At that time, there were indications that non-performing loans could increase in the banking sector. At that time, the demand for loans did not increase with the increase in non-performing loans. After the establishment of such a company, it is envisaged that the bank will hold the non-banking assets that cannot be auctioned or sold. In recent years, non-performing loans in banks and financial institutions have averaged more than 5 percent. Some banks have loans of more than 7 percent. At present, the bank is facing a lot of challenges in managing non-banking and reducing non-performing loans.

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