Laxmi Capital News
Will the present acute shortage of lendable funds in Nepalese Banking sector end soon Green Signal from Nepal Rastra Bank to bring in 82 arba funds from foreign lenders

At the time when the bankingsector of the nation is reeling under the acute shortage of lendable funds,Nepal Rastra bank has made it possible for the 28 commercial banks to obtainloans from the foreign lenders upto 25% of their Primary capital. With this newregulation coming into effect from the Foreign Exchange Management Departmentof NRB, it has been now possible for these commercial banks to bring Rs 82 arbaworth of investable funds from the foreign investors into the banking channelas the investable credit.

The mid-term review of fiscalsituation of the nation had showed that the commercial banks jointly have Rs3.28 kharba out of which 25% or Rs 82.12 arba can be immediately brought intobanking channel in form of foreign loans.

Agriculture Development Bankwhich as the highest Primary capital of Rs 22.86 arba is eligible to bring inthe highest volume of foreign loan as per the latest provision. ADB is followedby other blue chip banks namely Nepal Investment Bank, Nabil Bank and EverestBank. on the other hand, NCC Bank which has the lowest primary capital of Rs7.59 arba will be in disadvantaged side in this regard.

Following their respectiveprimary capital value, ADB can bring in the highest amount of foreign loans ofupto Rs 5.71 arba which is followed by Nepal Investment Bank’s Rs 5.13 arba.NCC Bank which has the lowest of the primary capital can only bring in theforeign loans of Rs 1.90 arba as per the data available until the end of secondquarter of the FY 2074-75.

The central bank has however setthe clear regulation to prevent the misuse of the funds brought into thebanking channel from  such lenders. As per the provisions, the bankscannot extend such funds as credits to the sectors like housing and real state,share market and others which have been recognized as unproductive by theRastra Bank and have to spend them in prioritized sectors such as hydropower,agriculture, microfinance, infrastructure development and alike.

News Links :

http://www.sharesansar.com/c/will-the-present-acute-shortage-of-lendable-funds-in-nepalese-banking-sector-end-soon-green-signal-from-nepal-rastra-bank-to-bring-in-82-arba-funds-from-foreign-lenders.html

Source : Sharesansar, 4th April 2018

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