KATHMANDU: Nepal Rastra Bank (NRB) has urged the Banks and Financial Institutions (BFIs) to invest in the productive sector as liquidity has been increased in the BFIs following the increment of value of US dollar.
The NRB urged the BFIs to invest in the productive sector as the remittance received from foreign countries was increased due to the increase on the value of US dollar in the international market.
NRB Spokesperson Bhaskarmani Gyawali said that Nepalese people working in foreign countries would send money through BFIs right at the time when the US dollar gets high value.
The BFIs have more deposits as Nepal has seen improved condition in service groups and export compared to the past so that when they invest in productive sector it could help in the national development.
The BFIs have enough deposits and they have difficulties to manage the amount. In such a condition, they have the possibilities of investing in the unproductive sector, as a result, they could not recover the invested money, and finally the BFIs have the chances of going bankrupt.
Now, the NRB has 3330 million US dollars in reserve and more than 46 billion Indian Rupees, which proves liquidity in the overall banking sector is adequate, said Spokesperson Gyawali.
Now the government has issued bonds and NRB has urged various banks and financial institutions to buy it, which ensures that the banks will not go bankrupt, he added.
To prevent banks from going bankrupt, NRB has brought the policy for not investing above 25 percent in real estate and housing, said Gyawali.
Economist Dr. Chiranjivi Nepal said as the value of US dollar has increased; the remittances increased by 28 percent and reached 75.88 billion in the latest one month of the current fiscal.