Liquidity crisis is getting resolved: Governor Adhikari

KATHMANDU: Nepal Rastra Bank Governor, Mahaprasad Adhikari, has said that the liquidity in the bank is getting easier recently.

Addressing the 36th Annual General Meeting of Nepal Bankers Association in Kathmandu on Monday, Governor Adhikari said that though the reality has not come out, liquidity is getting easier in the banks.

“The inter-banking interest rate has dropped to 7.07 percent. It had reached 8.5 percent before; this shows that the liquidity crisis is getting resolved,” he said.

Adhikari claimed that the central bank’s data for the last three months also showed signs of improvement in the economy.

He blamed the banks’ practice of adding debt to the debtors for the bank’s inability to provide loan to the new parties.

“After taking a loan, the borrower has to pay the loan. Can a new borrower get a loan? It is not appropriate to add more debt to the debtor. The trend of paying interest on earlier loans by taking more loans should end,” Governor Adhikari said. “The bankers should also tell us about these things. Clearly, the debtor must pay the debt. It should go in a cycle.”

Similarly, Anil Kumar Upadhyay, President of Nepal Bankers Association, said that the current high interest rates have directly affected the manufacturing industry.

He stressed on the need for a tripartite agreement between the government, Nepal Rastra Bank and the Association, he said.