Bankers seek timely Fiscal Policy
KATHMANDU, July 1st:
Bankers asked the government to address the current crisis in the money market through Fiscal Policy and Monetary Policy, apart from building public trust, timely budget and its implementation.
“The current measures of the central bank are short-term measures that have only postponed the crisis, not solved it,” said Nepal Bankers Association (NBA) Ashoke Rana.
The central bank has brought measures — refinancing, twice a week repo, Lender of the Last Resort and interbank lending against good loan — to address current tight liquidity situation.
However, public trust, timely budget and its implementation, and real estate rollover are key to solution to the current problem, he said, adding that the fluid political situation has declined public confidence on government, let alone on the financial institutions.
“Timely budget implementation and real estate rollover will inject the liquidity in the financial institutions,” Rana said.
Due to some financial institutions, public has lost faith on financial system as a whole, he said, adding that not only development banks and finance companies, the commercial banks are also under stress.
Supporting Rana, Nepal Development Bankers’ Association president Jhapat Bohara said that the central bank should be pro-active. “The central bank can solve the current problem through Monetary Policy and can suggest the government to address it through budget,” he said.
“Some of the institutions went bust due to lack of governance,” he said, adding that the development banks headquartered in outside the Kathmandu valley are in comfortable position as they are nor dependent on institutional depositors.
“Over dependency on the institutional depositors also invited the current tight liquidity situation,” Bohara added.
But the current crisis has taught us a lesson, he said, adding that failure of risk mitigation plan, assets-liability mismatch and lack of vision coupled with plummeting real estate and capital market hit the financial institutions hard where it hurts most tightening the liquidity situation.
He also suggested taking action against those financial institutions that misused public deposits, to restore public confidence on financial institutions as a whole.
“Due to some institutions, people lost confidence on overall financial system,” said Nepal Finance Company Association president Rajendra Shakya.
“Since depositors are also under stress, the central bank should show its presence,” he said, adding that the whole economy will collapse, if the financial institutions continue to go bust one by one.
Source: THT
Bankers asked the government to address the current crisis in the money market through Fiscal Policy and Monetary Policy, apart from building public trust, timely budget and its implementation.
“The current measures of the central bank are short-term measures that have only postponed the crisis, not solved it,” said Nepal Bankers Association (NBA) Ashoke Rana.
The central bank has brought measures — refinancing, twice a week repo, Lender of the Last Resort and interbank lending against good loan — to address current tight liquidity situation.
However, public trust, timely budget and its implementation, and real estate rollover are key to solution to the current problem, he said, adding that the fluid political situation has declined public confidence on government, let alone on the financial institutions.
“Timely budget implementation and real estate rollover will inject the liquidity in the financial institutions,” Rana said.
Due to some financial institutions, public has lost faith on financial system as a whole, he said, adding that not only development banks and finance companies, the commercial banks are also under stress.
Supporting Rana, Nepal Development Bankers’ Association president Jhapat Bohara said that the central bank should be pro-active. “The central bank can solve the current problem through Monetary Policy and can suggest the government to address it through budget,” he said.
“Some of the institutions went bust due to lack of governance,” he said, adding that the development banks headquartered in outside the Kathmandu valley are in comfortable position as they are nor dependent on institutional depositors.
“Over dependency on the institutional depositors also invited the current tight liquidity situation,” Bohara added.
But the current crisis has taught us a lesson, he said, adding that failure of risk mitigation plan, assets-liability mismatch and lack of vision coupled with plummeting real estate and capital market hit the financial institutions hard where it hurts most tightening the liquidity situation.
He also suggested taking action against those financial institutions that misused public deposits, to restore public confidence on financial institutions as a whole.
“Due to some institutions, people lost confidence on overall financial system,” said Nepal Finance Company Association president Rajendra Shakya.
“Since depositors are also under stress, the central bank should show its presence,” he said, adding that the whole economy will collapse, if the financial institutions continue to go bust one by one.
Source: THT
