If banks charge more than 16 percent interest, file a complaint, we will refund it: Governor Adhikari

Published On: December 2, 2023 08:00 PM NPT By: Republica | @RepublicaNepal

KATHMANDU, Dec 2: Nepal Rastra Bank’s (NRB) Governor Maha Prasad Adhikari has encouraged people to report any instances of excessive interest charges by banks to the general public.

Speaking at the 27th anniversary of the Society of Economic Journalists Nepal (SEJON) on Friday, Governor Adhikari assured that if industrialists file complaints with the NRB regarding banks violating interest rate regulations, the NRB would investigate and refund the excess amount.

Governor Adhikari highlighted that the NRB had already refunded Rs 4.76 billion to businessmen in response to excessive premium charges in the previous year. He urged businessmen to register complaints with the NRB instead of resorting to public grievances about inflated interest rates. He specifically cautioned against making unfounded claims that banks were charging 16 to 18 percent interest.

Governor Adhikari revealed that major businessmen typically paid interest rates ranging from 6 to 8 percent on their bank loans.

Governor Adhikari contested the idea of blaming the state and the central bank for loan-related issues, asserting that personal problems arose for businessmen when they borrowed without aligning their loans with their business plans. He underscored that the country's economy faced structural challenges and called for serious contemplation on reducing dependence on remittances.

Highlighting the government and NRB's commitment to bolstering domestic production, Governor Adhikari claimed that policy measures outlined in the budget and monetary policies were in line with this goal. He acknowledged that the economic slowdown had led to problems like bad loans of banks and emphasized the NRB's efforts to curb their further increase.

Governor Adhikari expressed concern that bad loans were also eroding the quality of loans, citing businessmen's oversight of their repayment capabilities when initially taking loans. Despite these challenges, he reassured that Nepal's banking sector remained stable, with the net Non-Performing Assets (NPA) of banks staying below 1.5 percent.

Furthermore, Governor Adhikari highlighted the robust state of Nepal's external sector, noting its historical strength and the capacity to import goods and services for 10.3 months.