Big commercial banks of Nepal have seen liquidity crisis since commercial banks are obliged to follow certain procedures to flow loan while cooperative organizations have easy process to provide loan to clients.[break]
Former governor Deependra Bahadur Chhetri said banks have become weak to collect savings due to the mushrooming of cooperatives in the country.
A large number of citizens have been attracted towards cooperatives due to the privilege of getting loan in an easy process.
Similarly, former governor Ganesh Bahadur Thapa said problems surfaced in collecting savings in commercial banks due to failure of Banijya Bank in amending policy on time.
Commercial banks offer only 12 per cent interest of the principle amount while the interest rate is 16 in cooperatives, he said, adding that the practice obviously lures the clients in cooperatives.
There are 56 finance companies in Nepal. In the first month of the current fiscal year, the companies have gained net interest profit Rs. 660.3 million.
Though there is total savings of Rs. two billion in commercial banks, the savings amount in cooperatives is 30 per cent high than that of commercial banks.
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