Thursday, 24th April 2014

FM Koirala tells banks to scale up investment


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Minister for Finance Shankar Koirala has called on the banks and financial institutions to invest more so as to reduce their increasing liquidity.

Addressing the 49th anniversary function of the Rastriya Banijya Bank (RBB) in the capital on Friday, Koirala said it is unbecoming of the banks to sit back and wait for customers for making investments although the government has specified the areas for investment.

Finance Minister Koirala's this comment comes high on the heels of the Nepal Rastra Bank coming out with its view that the banks' deposits were accumulating.

Speaking on the occasion, Governor of Nepal Rastra Bank (NRB) Dr Yubaraj Khatiwada wondered as to why the banks were reluctant to invest at a time when their deposits have been accumulating, the demand for investment was up and the areas for investment have been specified.

He said the need of the hour is to strengthen the banking sector, more capitalization and merger of financial institutions.

The NRB Governor also urged the banks and financial institutions to think of quality.

Finance Secretary Shanta Raj Subedi said that the banks should reach out to the customers. He suggested RBB to invest more and retain slight margin of profit to reduce the liquidity.

RBB is a government bank established in 2022 BS. The total capital of RBB is 8.58 billion.

Chairman of RBB Dr Narahari Dhakal said that the bank should focus on the rural areas rather than concentrate only in urban areas.

Representatives of different trade unions and employees unions at the RBB cautioned the management against allowing erosion in the bank's capital, reducing the liquidity and exploring and identifying the areas of investment.

RBB collected Rs 96 billion in deposit and invested Rs 52 billion as of 14 January, 2014.