Kathmandu, January 8
President Bidhya Devi Bhandari has emphasised that the banking and financial sector should focus on corporate social responsibility along with profits.
Addressing the third annual general meeting of Confederation of Banks and Financial Institutions (CBFIN), President Bhandari said here today that the government, BFIs and private sector have to work together to solve the current economic downturn.
"We are undergoing economic crises at present as the BFIs are facing liquidity crunch, sluggish investment in productive sector, drop in investor sentiment and external pressures," She said.
"Thus, coordination among the government, BFIs and private sector is imperative to solve the crises together."
President Bhandari further urged BFIs to focus on import-substitution policy and create job opportunities by investing on local production.
Likewise, Nepal Rastra Bank Governor Maha Prasad Adhikari said that the country is currently struggling for sustainable economic development due to external and financial sector instability.
"The global economy is heading towards the economic downfall which has also impacted our economy. Especially, with the standstill in construction business, other sectors have been affected as well," the governor said.
"One of the challenges for the central bank is to tame the inflationary pressure," he added.
Meanwhile, President of CB- FIN Pawan Golyan said that the general public and borrowers have a misconception that the BFIs are making excessive profits by charging high interest rates.
"Even though BFIs have been contributing to the progress of the society and the economic development of the country, the borrowers and the general public are under the illusion that they're making excessive profits by charging high interest rates," he said, adding, "However, the reality is that there is a directive from the regulatory body that most of the services and facilities should be provided free of charge."
He also informed that an instruction has been issued to reduce net interest margin - the difference between what BFIs earn on loans versus what they pay out as interest on deposits - to four per cent. "Because of this, the rate of return of BFIs has been reduced."
A version of this article appears in the print on January 9, 2023, of The Himalayan Times.
