Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari has said the recovery packages adopted in the last fiscal year had a positive impact on the country's economy.
Addressing an interaction organized by the Society of Economic Journalists (SEJON) on 'Deepening liquidity crunch: problems and solution' here Monday, Governor Adhikari claimed that the joint efforts of government and NRB resulted in quick recovery of the economy which was hit hard by the COVID-19. Even the private sector is encouraged with this, he added.
"Although the recovery package was a positive move for the economy, it has dented liquidity. In spite of liquidity crunch, there is no worry over loans," he observed, adding that quick change in government leadership and national politics is also behind the liquidity problem.
He shared the information that a Rs 351 billion loan was floated so far in the current fiscal year. But the deposit is comparatively low which resulted in a liquidity crunch. He is of the view that banks need to float loans on productive sectors.
On the occasion, Chairperson of the Federation of Nepalese Chamber of Commerce and Industry (FNCCI), Shekhar Golchha, however, said liquidity problem has surfaced due to the government's inability to increase capital spending. He warned that the current problem will affect 4.5 million share investors. Golchha also argued that it was difficult to restore tourism and small and cottage industries which faced the worst effects of the COVID-19 pandemic.
Similarly, the Chairperson of the Nepal Bankers' Association, Bhuwan Dahal, suggested NRB that it paid heed to the loan management of banks. According to him, among a total of 753 local levels, 750 had access to banking facilities, and the remaining three will also get it soon.
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