No environment for investment despite fund availability: Chair Golyan
Patan: Chairperson of Confederation of Banks and Financial Institutions Nepal (CBFIN) Pawan Kumar Golyan said there was no investment-friendly environment in the country despite availability of liquidity in banks and financial institutions.
At a press conference organized by CBFIN in Lalitpur on Tuesday, Chairperson Golyan said the financial institutions were afraid of flowing new investment despite having adequate deposits in banks. “Banks and financial institutions’ staffs are not assured that loan invested in different sectors would be paid back”.
He urged the media to raise the issue that it was wrong to create an environment for not to repay loan in an organized manner. “The interest rate charged for productive sector should be low than the interest rates for unproductive sector”.
“The fear for reducing the interest rate was to check flight of money for purchasing luxurious goods. But, the banks and financial institutions received huge amount of deposit due to higher interest rates. On the other, entrepreneurs are not in a position to bear the existing interest rates. Therefore, interest rates should be lowered”, he noted.
There was an investment of Rs 200 billion in small hydropower based energy sector from banks, he said, stressing the need to formulate policy taking into consideration the chance for leveraging economic prosperity.
CBFIN secretary Pushpa Sharan Mallik said the banks and financial institutions should discourage fixed deposit below one year so as to reduce interest rates. “There should be low cost for reducing interest rates. So, it needs to discourage receiving fixed deposit for less than a year”.
On the occasion, Golyan said the interest rates should be lowered effective from coming mid-April since the entrepreneurs are not being able to pay back the interest rates of the loan and bear the burgeoning loan portfolio.
