HEADLINE NEWS THE RISING NEPAL (DAILY)

Banks should invest in huge projects, says Deuba

BY A STAFF REPORTER

Kathmandu, Sept. 14: Prime Minister Sher Bahadur Deuba today inaugurated Kumari Bank amidst a function here this afternoon. The country’s fifteenth commercial bank was in operation for the last five months.

"The private sector has made a good progress in the banking sector," Prime Minister Deuba said in his inaugural address. "I feel that the commercial banks should now channel their investment into the big projects in hydropower, tourism and agriculture sectors for the overall development of the nation."

Premier Deuba said the commercial banks should run targeted programmes for the uplift of the poor people and assist the State to alleviate poverty.

Nepal Rastra Bank (NRB)’s Governor Dr. Tilak Rawal said many commercial banks and financial institutions came into existence with the adoption of liberal economic policy by the State since the mid 1980s.

Rawal said the rumours that the commercial banks did not have enough liquidity to pay their clients were not true. "The banks do have enough liquidity to pay the clients." Many depositors rushed to the banks in the recent weeks to withdraw their deposits when the lawmakers of the Rastriya Prajatantra Party and Nepal Sadhbhavana Party stalled the House of Representatives demanding a ceiling on property. Their move came as a reaction to the government’s announcement to reduce the land holding ceiling.

Rawal conceded that some people withdrew their deposits and purchased gold, adding the situation was normal now. He denied that the Nepalese currency would be devalued in the near future.

He, however, said peace was a precondition for economic growth. He hoped the situation would improve with the government giving top priority to peace and security. "We should move ahead sensitively in context of the global meltdown."

Rawal said Nepal Bank Limited and Rastriyal Banijya Bank were not in a situation to be closed immediately. "They should instead be reformed as they can play a crucial role to industrialise the nation."

Rawal appealed to the commercial banks to avail of the refinancing facility and forward maximum loans to the most needy.

In his welcome address, Bank chief executive officer Surendra Bhandari said his institution would work in line with the policy of the State and the central bank. "We will devise our policy keeping in view the directions of the government and the NRB and the opinions of the clients."

The objective of the Bank is not only to earn profit but also to serve the interests of the depositors and to contribute to national development, Bank Chairman Noor Pratap JB Rana said. He informed the Bank would launch Internet banking and home banking soon and open branches in different parts of the country.

The bank has collected a total deposit of Rs. 600 million, advanced Rs. 580 million loans and earned a profit of Rs. 5.8 million during its five months’ operation.

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