NRB Governor Maha Prasad Adhikari addressing the 49th anniversary of the Deposit and Credit Guarantee Fund (DCGF) held in Kathmandu on Tuesday.
KATHMANDU: Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari has said that Banks and Financial Institutions (BFI) perceived the sectors prioritized by the Central Bank for investment as risky sectors.
Addressing the 49th anniversary of the Deposit and Credit Guarantee Fund (DCGF) held in Kathmandu on Tuesday, Governor Adhikari said so.
“BFIs are used to providing loans on the basis of their ease when the State’s focus is at fostering new entrepreneurs and increasing production. Unfortunately, BFIs perceive State-prioritized areas as risky sectors,” Governor Adhikari said.
He added, “The regulator had to instruct BFIs to allocate a certain amount in State-prioritized areas due to the same reason.”
“The trend of random lending has out some BFIs in jeopardy. NRB has so far declared 15 BFIs as crisis-ridden.”
Stating that DCGF was guaranteeing both deposits and loans till date, Adhikari said that the Fund still had much to do.
“Data shows that DCGF has guaranteed nearly Rs 3 billion loans till date,” he said.
The latest report of the World Bank has stated that the global economy could experience a recession by 2023.
“If the recession in the world economy affects BFIs in Nepal, the entire national economy would be affected,” he said.