Sunday, February 17, 2019

Government may interfere in interest rate

The government could interfere in the banks to force them to bring down interest rates, if necessary, according to finance minister Dr Yub Raj Khatiwada.
Addressing a programme mark to celebrate 10th  anniversary of National Banking Institute (NBI) today in the valley, he said that profiteering is good but it should be in the limit. "The banks and financial institutions should refrain from making excessive profits," he added.
The government is under pressure from the private sector to lower the interest rates. Prime Minister KP Sharma Oli has yesterday directed Khatiwada to talk to bankers on interest rates.
However, speaking at the same programme, Nepal Bankers Association (NBA) president Gyanendra Dhungana said that it is not possible to bring down the interest rate to single figure. "Industrialists should not be very optimistic about lower interest rates as the base rate of the banks stands at 10 percent," he added. According to the central bank rule, the banks and financial institutions can add upto 5 per cent in the base rate while lending.
Khatiwada, on the occasion, further said that the country is in need of carrying on the agenda of good governance, high integrity, and greater banking efficiency through the best service at the least cost possible by leveraging resources in the most productive areas.
Likewise, central bank governor Dr Chiranjivi Nepal called for a massive transformation in traditional payment system due to advancement in technology. He also highlighted the needs for providing better, affordable services to customers as well as service automation in quest of higher efficiency and risk management
Dr Khatiwada and Dr Nepal jointly inaugurated the programme, where NBI also hosted a Banking Conclave with the theme 'Deliberation for the next Decade'. Some leading banking professionals including MD of State Bank of India Dinesh Khara, MD and CEO of IDFC Bank V Vaidyanathan, Banking expert and Independent Director of State Bank of India Sanjiv Malhotra, Treasurer of HDFC Bank Ashish Parthsarathy, CEO of Foreign Exchange Dealers Association of India (FEDAI) Ashwani Sindhwani and the renowned business journalist from India Tamal Bandyopadhyay spoke on the occasion.
NBI is collectively established by the central bank and Nepal Bankers’ Association with support from Asian Development Bank (ADB) and the government.

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