Interacting with the press, NRB Governor Dr Yuba Raj Khatiwada admitted the volume of loans default, particularly by the property developers, has soared of late. [break]
The financial statements of the banks and financial institutions for the first quarter of 2011/12 too had reflected such a situation.
“We are already discussing various options to manage the impact of asset bubble burst,” said he, adding that if the private sector approached the central bank, it was ready to support it to set up the AMC to manage risks that problems in realty sector could cast in the financial system.
Although Dr Khatiwada did not elaborate further on AMC, he expressed views that the government should also participate in such a company.
Governor Khatiwada also suggested the land and housing developers to sell the property even if those fetched low returns.
“They (developers) should not always seek high profits. It is a business and sometimes you suffer a loss in the business,” said he. If the developers lowered prices of property, Dr Khatiwada viewed families that are enjoying handsome remittances flow will readily buy them.
“This can breathe in new life in the realty market,” he stressed.
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