KATHMANDU: Santosh Koirala, President of the Nepal Bankers’ Association, has condemned attacks on banks and financial institutions carried out in the name of political interests, calling such acts “regrettable.”
Speaking at an event organized by the Society of Economic Journalists’ of Nepal (SEJON) on Monday, Koirala highlighted that physical attacks on bank staff have increased challenges in the banking sector.
“Lending and borrowing are clearly defined under the law, and procedures are followed accordingly, but physical attacks on employees are deeply unfortunate,” he said. Koirala also urged people not to fall for exaggerated claims, such as promises of loan waivers without legal basis.
He emphasized the transparency of the banking sector and warned that any disruption in this sector can have ripple effects on other parts of the economy. “This sector provides employment to over 50,000 people, and its setbacks affect multiple sectors. Caution is essential,” he noted. Despite sufficient liquidity, Koirala said demand for loans has been low, partly due to political instability impacting investor confidence.
Dr. Revat Bahadur Karki, coordinator of the Banking Sector Reform Suggestion Task Force, 2082, highlighted the regulatory role of Nepal Rastra Bank, noting the need for a balanced and flexible regulatory approach. “Nepal’s banking sector is among the best in South Asia, but overly strict central bank policies may not always be beneficial. Banks should be allowed self-regulation and unnecessary rules should be removed,” he said.
Dr. Karki also pointed out capital flight issues, as some Nepali depositors prefer Indian banks due to better interest rates, and stressed that the central bank must be vigilant when one bank’s mistakes impact others. His task force’s report included immediate, short-term, and long-term recommendations for structural reforms, regulatory adjustments, and easing of unnecessary restrictions.
According to Dr. Karki, the banking and financial sector contributes about 5 percent to Nepal’s GDP and could play a larger role if allowed to operate independently.
Comment