सिंहदरबार संवाददाता
Kathmandu. Commercial banks have made public the financial statements of the first six months of the current year. According to the raw data made public by the banks, the average distributable profit of banks has been negative by 3.97 billion rupees.
The average bad debt of banks has reached 4.49 percent, while earnings per share has fallen to 14.71 percent. Similarly, the return on equity (ROI) is limited to 7.73 percent. Speaking at a press conference on Tuesday, Nepal Bankers Association (NBA) President Santosh Koirala said that recovery stress is increasing in banks. He indicated that recovery stress could increase further as security threats are being placed on employees to collect loans given by the bank.
At the program, he said, “Recovery stress is increasing in banks, bank employees who are going for recovery are now feeling unsafe, we are drawing the attention of security agencies and the government, after this, local bodies are also providing assistance.” No.”
This is the main challenge seen by the Bankers Association
Although the National Bank has set a target of 12 percent for credit expansion this year, credit has not been flowing at the expected pace. According to the data for the first six months of the current year, 472.6 billion rupees have been flowed. During this period, deposits have been collected at 589.10 billion rupees.
According to which, the CD ratio has been limited to 79.10 percent. The NBA has mentioned that the demand for loans has not increased. However, the NBA is also aware that loans should not be disbursed by creating artificial demand. The NBA argues that the morale of businesses and businessmen has been weakened due to the lack of loan growth.
Therefore, the government has emphasized the need to boost the morale of the private sector. The continuous increase in bad loans of banks has been considered as the biggest problem of the current banking sector. The average bad loan rate has reached 4.49 percent. Various problems have arisen for the recovery of bad loans. Attempts to attack bank employees who go to recover bad loans have started.
Similarly, the local government is also increasingly inclined not to listen to the borrowers and act on time. The Bankers Association has also taken the declining profit rate as a challenge. NBA Vice President Surendra Raj Regmi said that investors in banks must be disappointed due to the declining profit. He said, “There are rumors that banks have earned so many billions, but we should also look at the investment in it, how much investment has been made to earn a billion in profit. How much risk has been taken. Banking is a very transparent business, it has strict monitoring and strict regulation by many bodies.”
Similarly, the NBA has also taken the rising inflation as a challenge. The NBA has concluded that the young workforce leaving every year will also have a serious impact on the Nepali economy.
What do bankers want ?
As commercial banks are going through difficult times, the National Bank has mentioned that many things need to be done to improve the condition of the banks. Due to low profits, investors in banks have started taking their investments as a risk. For this, bankers have demanded that service fees and charges be increased. Similarly, bankers have suggested changing the base rate and spread rate. The NBA has mentioned that direct lending requirements should be changed.
Similarly, they have emphasized that the provisioning system for bad loans by banks should also be changed. They have been repeatedly demanding that the government pay attention to the safety of bank employees. The NBA has emphasized that the government should increase capital expenditure.
In the first six months of the current year, the government has collected Rs 575 billion 190 million in revenue. In terms of expenditure, the government has spent Rs 667 billion 610 million. Compared to the government’s income, the expenditure is 92 billion more than the income. During this period, the government has made only Rs 56 billion 930 million in capital expenditure. The government’s target is to spend Rs 367 billion 280 million this year. But the government is not able to increase spending.
It is mentioned that steps should be taken to attract foreign investment, public-private partnerships should be increased, and concessional packages should be introduced. Similarly, bankers have said that the government should immediately pay the outstanding amounts and promote the tourism and hydropower sectors.
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