Wednesday, May 25, 2011

Banking system is safe: Central Bank

Central bank today assured bankers that it is ready to help the public build their confidence in the banking system.
At a time, when the public seems to be losing confidence on the banking system due to poor corporate governance, overnight profit seeking mentality and mismanagement of some of the institutions’, central bank governor Dr Yubraj Khatiwada, senior deputy governor Gopal Kafle, deputy governor Maha Prasad Adhikari and executive directors of various departments briefed the bankers that overall financial indicators are better, except for some institution.
"The central bank is ready to help banks and financial institutions, provided they maintain their financial discipline, manage portfolio, and follow central bank’s directives,” the central bank higher officials told the representatives of Nepal Bankers Association (NBA) at a meeting today morning.
There is a need of confidence boosting of public on the banking system and that can be done jointly by regulatory authority of the financial market – central bank – and banks and financial institutions. "The psychological pressure on depositors, either to believe banks and financial institutions or not, is a temporary phenomenon, it will not last long,” the central bank official said.
"The public need not fear," he said, adding that the loss of confidence is due to various reasons, except poor corporate governance of some of the financial institutions like Nepal Share Markets and Finance that has already been brought under the book and will be penalized.
"Except some cases of some of the financial institutions that have not adhered to the prudent banking norms, it is not a systemic problem, and the banking system is safe,” assured the central bank.
It has also asked the bankers to come straight forward, if they have any problem. "We are ready to solve problems of the banks and financial institutions, if they have any,” said the officials.

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