KATHMANDU: Nepal Rastra Bank Governor Dr. Biswo Nath Poudel has cautioned against overreliance on monetary policy, stating it mainly aligns with fiscal policy and cannot solve all economic problems alone.

Speaking to the Parliamentary Finance Committee, he emphasized that directed interventions like targeted lending are limited tools.

Discussing the Bank and Financial Institution Act (BAFIA) amendments, Poudel urged clear objectives and stressed equitable access to financial resources.

He noted past efforts to extend credit to disadvantaged communities have fallen short and warned that simply increasing loans does not guarantee business growth without infrastructure and supportive sectors.

Poudel also highlighted the need for the government to identify viable investment opportunities, stressing forced credit expansion risks defaults.

He assured that excess liquidity in the financial system has not been wasted and is available for investments if encouraged by the state.