'More people withdrawing their deposits from banks'

By A Staff Reporter

KATHMANDU, Aug. 20: After the CIAA raided the homes of 22 government employees last Friday, the number of people withdrawing their deposits from the banks has suddenly gone up.
According to a senior official at Nepal Rastra Bank (NRB), the amount of deposit withdrawn from various banking institutions was comparatively larger than last week. The NRB normally sees a transaction of between Rs. 1 -1.2 billion each day. But the level of transaction has gone up since Monday, he said.

"However the clear picture will be known within this week," the NRB official in condition of anonymity.
A senior official at Nepal Bank Ltd. central office said that the number of people withdrawing their deposits unexpectedly increased today. "This could be due to the fear of psychosis," he said.
The tendency to withdraw deposits has gone up not only in Nepal Bank Ltd, but in the Standard Chartered Bank, Himalayan Bank, Nepal Bangladesh Bank and SBI Bank also.

Narendra Bhattarai, president of Nepal Bankers Association (NBA), talking to The Rising Nepal admitted that the number of people withdrawing their deposits was on the rise. According to Bhattarai, the amount of liquid fund in the banking sector now stands at Rs 39 billion. Deposits in fiscal year 2000-2001 grew by about 13- 15 per cent while lending increased by 13- 14 per cent. However, deposits declined to one per cent (by only Rs 13 billion ) last fiscal year.

Bhattarai said that Rs 13-14 billion were withdrawn from the total banking system when the government enforced the voluntary disclosure of income scheme (VDIS) in January this year.

The banking system has become a victim of such move, he said.

He also said that such actions had triggered a lackadaisical attitude among the government employees for the last five or six months.

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