KATHMANDU, Jan 5: Bank promoters have complained to the Ministry of Finance that the Nepal Rastra Bank (NRB), the country’s central bank, has adopted a policy of micromanaging the banks and financial institutions (BFIs).
In a meeting with Finance Minister Bishnu Prasad Paudel on Monday, representatives of the Confederation of Banks and Financial Institutions Nepal (CBFIN) - the umbrella organisation of the chairpersons and directors of BFIs in the country - complained against the NRB’s functioning. CBFIN representatives blamed the central bank for its undesired intervention in fixing banking service charge and inter-bank service fee, among others.
Revised interest rate corridor system introduced
Earlier, the then Finance Minister Yuba Raj Khatiwada was blamed for stepping into the shoes of Nepal Rastra Bank. During the interest rate war seen in the sector three years ago, the Finance Ministry was criticized for its attempt to fix the interest rate, overtaking the jurisdiction of the central bank. And now the banks’ promoters are seeking government intervention in the functioning of autonomous monetary institutions again.
The CBFIN representatives also demanded the government to facilitate Non-Resident Nepalis to bring in funds through banking channels, to provide easy access to small and medium enterprises to get subsidized loans and to allow banks to conduct brokerage business. Reducing corporate tax for banks from 30 percent to 25 percent and providing flexibility in spread rate for the financial institutions looking for merger and acquisition are among other demands of the CBFIN.
