He stressed on the need for a huge capital once the constitution is ready and the country moves on the path of economic transformatio“Clearly, the banks´ existing capital will not suffice. I urge the banks to enhance their capacity to lend more,” said Adhikari. [break]
Speaking at the inauguration program of Century Bank, the 31st commercial bank of the country, that began operation from Thursday, Adhikari even cautioned banks against frittering away their investment in non-productive and consumption sector.
The newly opened bank´s operation was inaugurated by Prime Minister Jhalanath Khanal who urged the banks to invest openly in productive sectors like infrastructure, agriculture, hydropower and tourism.
“The country needs more investment in productive sectors, particularly, to create more employment opportunities and give new impetus to economy,” said Khanal.
Governor of Nepal Rastra Bank Dr Yuva Raj Khatiwada, meanwhile, expressed concerns over the widening gap between deposit and lending rates (spread rate) in the banking sector. “This is not what we expect from the professionally run institutions,” said he, and urged the banks to sharpen their competitive edge by focusing more on providing enhanced services to earn profit rather than by widening the spread rate.
Dr Khatiwada even noted that rise in the spread rate was largely due to misconception among bankers that bank´s profit must never drop.
“The banks´ profit should grow in line with economic growth. It is unhealthy and unfair to unnecessarily seek high profit return,” said he. Governor Khatiwada even charged banks of not complying with the service related guidelines issued for them.
Chairman of Century Bank Pradeep Man Vaidya, meanwhile, promised to operate with spread margin of just 1.5 percent in the first year of operations. “After that too, we will never let spread jump above 2 percent,” he stated.
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