Finance Minister Dr Prakash Sharan Mahat on Sunday held a meeting with the bankers to discuss the current challenges seen in the banking system.
Inviting the CEOs of the commercial banks at the Ministry of Finance, Dr Mahat discussed the reasons for limited demand for loans even despite sufficient liquidity in the market.
In recent days,, the finance minister is holding consultations with the representatives of the private sector, donor agencies, regulatory bodies and other stakeholders regarding the interventions to be taken for reforms in the economy.
"Why did the demand for loans not increase in the banks and financial institutions? How can the banking sector help in making the economy float? What should the government and Nepal Rastra Bank do to end the existing status?" he asked.
On the occasion, Chairman of Nepal Banker's Association Sunil KC said the private sector and the banking sector have lost their confidence and the provision of taxation on FPO has created confusion.
Likewise, KC said that the money of the local levels should be counted as the deposit adding that almost Rs 150 billion in deposit has been reduced since the beginning of the current fiscal year.
KC stated that the interest rate is in the downward trend and added that the interest rate is likely to reach the single digit.
The bankers suggested that the plotting of the land should be opened and the real estate market should be made relaxed and loan to the small and medium enterprises should be simplified.
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