Nepal Bankers Association Chief Notes Weak Loan Growth Despite High Deposits

Kathmandu. The Chairman of the Nepal Bankers Association, Santosh Koirala, stated that although there is a large volume of deposits in the banking system currently, the pace of credit expansion remains weak.

Addressing the 36th anniversary of the Citizen Investment Trust, he mentioned that banks currently hold approximately NPR 7.7 trillion in deposits. Chairman Koirala informed that out of this, banks have disbursed loans amounting to about NPR 5.8 trillion, noting that the growth rate of loan disbursement has not increased recently.

Koirala did not disclose the reasons for the sluggish loan growth. He also mentioned that the banking sector faces various challenges. According to him, bank employees have to face various threats and pressures during the loan recovery process. He stated that the Bankers Association needs to become more proactive on this issue.

Koirala said, 'Currently, banks have a deposit of NPR 7.7 trillion. We have disbursed loans of about NPR 5.8 trillion. The growth in loan disbursement is not increasing. There are various types of challenges in the banking sector. There are many types of threats when going to recover loans. The Bankers Association is also facing a situation where it needs to move forward a bit. If a narrative emerges that no one needs to repay the bank's money, it will affect the entire economy. Narratives like 'no need to repay the money' are emerging, and incidents like blackening faces or putting shoe garlands on employees have been observed. If such things happen, it will not be good for our economy in the future.'

According to him, narratives such as 'no need to repay the loan' are being created. He stated that if such activities and wrong messages begin to spread, it will not be a good sign for Nepal's economy in the future.