Kathmandu. Since his appointment as governor of Nepal Rastra Bank( NRB), Bishwanath Poudel has been saying that the bank’s loan has been centralized. He has also presented the data and spoken about it in the parliamentary committee.
The only issue that Governor Poudel is trying to show is more centralization of debt in the economy. He has now started focusing on decentralisation of credit i.e. equitable distribution. But will he succeed in this or not? There is also this question.
According to Governor Poudel, 0.1 per cent of the total 1.94 million borrowers currently account for 3.9 per cent of the total loans. This shows that access to capital and credit has been taken over by a limited number of business groups. In this way, moving to a limited business group shows that in the long run, competitive markets and economic inclusion can be hindered.
In the recent past, Governor Poudel has been working hard to break this system. He has been saying that there is more centralization of credit and resources in Nepal and this will lead to inequality. He said that the centralization of opportunity will lead to instability. Poudel said that they want equal opportunities in the society.
At present, there are 373 shareholders holding more than 1 percent shares in banks and financial institutions. There are a total of 373 shareholders including 72 in commercial banks, 130 in development banks and 171 in finance companies. The banking sector has been accused of providing loans only around them. Governor Poudel has been saying that this is creating an unequal practice in loans.
Poudel argued that the unequal practice of credit flow in Nepal also shows the separation of bankers and businessmen. Governor Poudel seems to be trying to overcome the current situation where the same person sits on the bank’s board of directors and gives concessional loans to his own company, interferes in risk assessment or influences regulatory policies. However, experts say that adequate discussion is necessary for this. For this, Governor Poudel has given priority to bafia amendment.
At a meeting of the Finance Committee under the House of Representatives on Sunday, Executive Director of The Rastra Bank, Guru Prasad Poudel, said that the Bank and financial institutions act (BAFIA) prohibits banks from taking loans from the same bank as they have more than 1 per cent ownership. He explained why the offer of 1 per cent was made.
Executive Director Poudel said that although the BAFIA Act came into force in 2073 BS, it was brought in 2071 BS. He said it had already started in 72. He said that the capital of the bank, which had a small capital at that time, has now reached Rs 8 billion.
According to Poudel, it has been proposed to increase the significant ownership of the banks from 2 percent to 1 percent as the capital of the banks is large. It has been proposed that a person holding 1 percent share of banks and financial institutions in BAFIA will not be able to take loans from the entire banking system. This proposal has been made to separate bankers and businessmen.
