Kathmandu. Rajesh Upadhyay, acting president of the Bank and Financial Confederation of Nepal (CBFIN), has said that the banks and financial institutions have not been able to flow loans due to low demand in the economy.

In an interaction organized by Sibifin, Upadhyay said that the demand in the overall economy is weak due to the decrease in consumer manpower and policy instability. “The main thing is the demand for loans, and the reason why credit flow has not increased relatively even when interest rates are low is because of the significant decrease in demand,” he said.

Upadhyay also said that Nepal’s natural resources have not been utilized adequately. He said that exports and economic activities can be expanded through the maximum utilization of resources including forests, herbs and timber. He also said that legal and policy reforms are necessary for the economic development of the country.

“The time has come to change the model of management of the country. The country should be taken forward with a professional and performance-based management style,” he said. Stating that the government is currently going to amend 166 laws, he expressed the belief that this will also have a positive impact on the development of the economy.

Stating that the recent Bhotekoshi floods in Rasuwa had a big impact on the economy, Acting Chairman Upadhyay stressed on the need to incorporate climate and disaster risk in banking and investment decisions. He said that risk management is necessary especially in the investment made in the hydropower sector.

Manoj Goel, general secretary of CBFIN, said that although the banking sector is in a difficult situation, it is not complicated and even a simple reform can make it difficult. He said that there is a possibility of investment in every sector of Nepal. But for this, an investment-friendly environment is necessary, he said. He said that there has been a lot of damage due to the floods. “This sector has also suffered due to the Rasuwa floods, especially the borrowers, and the central bank is expected to facilitate it,” he said.