KATHMANDU: MoF has formed a committee to design stimulus packages to sort out the perennial challenge of credit crunch in the banking system following the increment in regulatory (paid-up) capital requirement.

The committee led by the Joint Secretary at the MoF Ram Sharan Pudasaini, comprising high-level officials from NRB and Financial Comptroller General Office, has been studying how security deposits in various government agencies can be provided to banks as deposit for certain period.

Talking to The Himalayan Times, Joint Secretary Pudasaini said credit crunch is a short-term phenomenon and it will be resolved after government’s development expenditure starts to rise and money withdrawn from banks during elections starts returning to the banks again.

“This is why we will suggest the government to provide security deposits of various government agencies to the banks until the problem is resolved,” said Pudasaini.

Bankers are seeking refinancing facility and other stimulus packages from government as their income has been adversely affected along with brake inloan expansion due to lack of fresh deposit sources.

Pudasaini-led committee will submit the report to finance minister by this week.