Kathmandu. The devastation caused by the devastating floods of the Bhotekoshi river and the huge capital of more than Rs 13 trillion accumulated in the banks \u2013 only one link connecting these two sides will be reconstructed. The time has come to turn the current crisis into an opportunity to speed up the economy, which has been sluggish due to the political transition and policy confusion. The physical reconstruction of the Bhotekoshi area of Rasuwa can become a big engine for the private sector to overcome the serious situation of money being deposited in the bank but not invested in the market. <\/p>\n
The latest data from the Rastra Bank shows that one aspect of the economy is very strong, the banks are full of investable money, the interest rate has fallen to a historic low and the foreign exchange reserves are strong due to the inflow of more than 23 trillion remittances. However, the other aspect is equally disappointing, the credit expansion to the private sector has shrunk to only 6.5 percent in the last financial year, compared to the target of 12 percent. <\/p>\n
According to the data till Ashad 2083, the private sector is reluctant to take further loans as the total loan disbursement is Rs 5.857 trillion. The Jenji movement of August 2082 and the political instability that followed have crippled the private sector in such a way that even after the formation of a new government in March, the investment environment has not yet gained momentum. <\/p>\n
In the midst of such slack, the private sector should make a model of revival of the billions of rupees caused by the floods in the Bhotekoshi hydropower project, business infrastructure and road network. In order to mobilize the 13 trillion liquidity accumulated in the banks, the government should not only make policies but also give a strong guarantee to the private sector to rebuild. After the 2015 earthquake, the indomitable courage shown by the private sector and the contribution made in the reconstruction saved the country from a major economic crisis. In the current post-flood situation, there is a need for the same energy and cooperation. <\/p>\n
According to the data, the average interest rate of commercial banks has now come down to 6.55 percent, which is a golden opportunity for businessmen to start working by taking loans. However, the credit to the agricultural sector has fallen by 1.8 percent, while the growth of the industrial production sector is very slow. <\/p>\n
If the private sector’s capital and technology are attracted to the construction of destroyed structures in the flood-affected areas of Bhotekoshi and the management of the displaced people, then the bank’s money will go directly to the productive sector. This increases the consumption of cement, sticks and construction materials on the one hand, and increases the demand in the market by creating employment on the other. <\/p>\n
At present, the non-performing loans of the banks have reached 5.66 percent, which has put some pressure on the financial sector, but the capital fund and liquid assets position of the banks (37.91 percent) is very strong. This means that the banks are capable of investing, but the businessmen need courage. If the government takes a policy of listening and cooperating, and arranges special relief packages and refinancing for the flood-affected businessmen, then the private sector is sure to revive again. If the private sector is put forward in the reconstruction of the Bhotekoshi, the accumulated liquidity of Rs 13 trillion will get the right outlet. <\/p>\n
The time has come to speed up the economic cycle of the country, it is not enough to do it. The process of realizing the dreams swept away by the floods through reconstruction will boost the morale of the tired private sector. When the money comes out of the bank and starts spending on construction work, then the graph of the stalled loan expansion will climb to 6.5 percent. If the state becomes the guardian of the private sector and hands over the leadership of reconstruction, then the current natural disaster can prove to be a milestone for the revival of the Nepalese economy.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. The devastation caused by the devastating floods of the Bhotekoshi river and the huge capital of more than Rs 13 trillion accumulated in the banks \u2013 only one link connecting these two sides will be reconstructed. The time has come to turn the current crisis into an opportunity to speed up the economy, which […]<\/p>\n","protected":false},"author":9,"featured_media":314115,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45117,45031,45159],"tags":[],"class_list":["post-314117","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bank-finance-en","category-banner-news-en","category-news-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/314117","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=314117"}],"version-history":[{"count":1,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/314117\/revisions"}],"predecessor-version":[{"id":314118,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/314117\/revisions\/314118"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/314115"}],"wp:attachment":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=314117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=314117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=314117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}