Expert Speaks: How will the relaxation of 5% loan provisioning rule impact the market?
Sun, Apr 5, 2015 12:00 AM on Experts Speak,
Shreejesh Ghimire, CEO, NMB Capital
ShareSansar, April 5:
The revision won’t have much impact as now banks have ample time to make gradual adjustments to the provisioning rule. However, if the directive on provisioning was implemented from this Chaitra itself, it would have had significant impact in the banking sector as well as the market.
Since people are not in the habit of making payments on time and banks and finance institutions, too, were not prepared to change their working style so suddenly, the new provisioning would have affected the entire sector. But there is no reason to worry now.
The market is also likely to see some improvements in the coming weeks as the confusions surrounding the new provisioning rule have been cleared.
The revision won’t have much impact as now banks have ample time to make gradual adjustments to the provisioning rule. However, if the directive on provisioning was implemented from this Chaitra itself, it would have had significant impact in the banking sector as well as the market.
Since people are not in the habit of making payments on time and banks and finance institutions, too, were not prepared to change their working style so suddenly, the new provisioning would have affected the entire sector. But there is no reason to worry now.
The market is also likely to see some improvements in the coming weeks as the confusions surrounding the new provisioning rule have been cleared.
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