September 13: Stating that the investment capacity of Nepal’s commercial bank in infrastructure is weak, the World Bank has suggested reducing the number of such banks from the existing 28 to 15.
The World Bank in its report on Nepal Infrastructure Sector Assessment unveiled during the Third Nepal Infrastructure Summit on Thursday suggested reducing the number of commercial banks to increase their paid-up capital. This, according to the World Bank, would help the banks release loan in the infrastructure development.
The World Bank has suggested the concerned authorities to reduce the number of commercial banks to 15. It further said that the number can further be decreased to 10 in collaboration with international banks. The report suggests commercial banks to increase their paid-up capital to Rs 16 billion.
The World Bank’s suggestion has come at a time when Nepal Rastra Bank has adopted a policy to encourage ‘big merger’ in the country.
Although the central bank is planning to reduce the number of commercial banks, it has not specifically decided the number of such banks. However, the central bank officials say they have tentatively decided to halve the number of commercial banks.