November 12: Finance Minister Janardan Sharma held a meeting with chief executive officers of 27 commercial banks on Friday to discuss the problems faced the banks including liquidity crunch and the current financial situation of the country.

The meeting held at the Finance Ministry was attended by the Governor of Nepal Rastra Bank (NRB), CEOs and representatives of commercial banks, according to a press statement issued by the ministry.    

During the meeting, Finance Minister Sharma reportedly said that there isn’t any specific reason for the current liquidity crisis and there is no need to panic about it. Minister Sharma expressed his view that a short-term resolution to the current liquidity crunch could be to increase government spending.
The central bank has time and again issued repo worth millions of rupees in a bid to maintain the liquidity. He added that the liquidity crisis can be resolved only by investing in productive sector.

Meanwhile, Minister Sharma also urged the banks to consider the lands of rural areas as collateral for providing loans.

Stating that the banks have been providing loans only to the land owners whose lands have access to motorable roads, Minister Sharma said that those who do not have such access have been deprived of such facilities. If the banks cannot provide loans, it is meaningless to have banks, opined the minister.

Finance Secretary Madhu Kumar Marasini urged the banks to stop providing loans to unproductive sectors. This, according to Marasini, would reduce liquidity crunch. 

Similarly, Chairman of Nepal Bankers’ Association Anil Upadhyay suggested that the liquidity crisis could be resolved by increasing the government’s capital expenditure.

Likewise,  CEO Of Nabil Bank Anil Shah said that the import of unnecessary items and goods should be stopped in order to increase the country’s foreign exchange reserve.