Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal Rastra Bank Governor Dr. Bishwo Poudel has urged banks and financial institutions to abandon “lender-like intimidation” and instead design loan products that address the real demands of local entrepreneurs, as sluggish credit growth continues to weigh on the economy.
Speaking at a program in Kathmandu on Monday, Governor Poudel said Nepal’s banking system is facing visible side effects due to weak liquidity management and the lack of new, responsive financial products.
“Liquidity mismanagement has created side effects. We are not seeing new loan clients. Banks have not introduced innovative financial products,” Poudel said, adding that local entrepreneurs across the country have repeatedly complained that banks are not offering loan schemes aligned with their business needs.
He emphasized that bank branch managers and credit officers must work closely with entrepreneurs to design demand-driven financial solutions.“Local entrepreneurs say the products do not match their needs. Therefore, I request local managers to work closely with them and bring the right financial products,” he said.
Credit Expansion Remains Weak Despite Excess Liquidity
Despite four months of the current fiscal year having passed, credit expansion has remained notably sluggish. Banks have disbursed only Rs 49 billion in new loans so far, while more than Rs 1.1 trillion in loanable funds remains idle in the banking system. Bankers say borrowing appetite has dropped amid economic slowdown, low market confidence, and high-risk perception.
Governor Poudel suggested that banks must proactively identify new business sectors instead of waiting for credit demand to rise on its own.
“Don’t Act Like Moneylenders” — Governor’s Clear Message
Governor Poudel also conveyed a strong message regarding customer relations, saying that several entrepreneurs have complained about managers behaving like traditional moneylenders.
“Entrepreneurs feel bank managers talk and act like moneylenders — intimidating and threatening. This must stop. Maintain a good professional relationship,” he said.
He reminded CEOs and managers that the current economic environment requires leadership, innovation, and sensitivity to the needs of business communities.
“The time has come for CEOs and managers to show capability and identify new areas for business growth,” Governor Poudel said.
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