Wagle to banks: Lend more to build Rs 7. 4 trillion economy
KATHMANDU: Finance Minister Dr Swarnim Wagle has called on commercial banks to step up investment and credit expansion, saying stronger cooperation between the government and the banking sector is essential. . .
KATHMANDU: Finance Minister Dr Swarnim Wagle has called on commercial banks to step up investment and credit expansion, saying stronger cooperation between the government and the banking sector is essential to accelerate economic growth and expand Nepal's economy to Rs 7. 4 trillion. Speaking at a meeting with chief executive officers of commercial banks on Tuesday, Wagle said the government had "changed the course" of economic policy to stimulate growth and wanted banks to play a bigger role in creating jobs and increasing private sector investment. "Our goal is to expand the economy to Rs 7. 4 trillion. That requires higher investment and more employment," Wagle told bankers. "Tell us how you can contribute, and let us know what the government needs to do to support you. "The discussion, organized by the Ministry of Finance, focused on the implementation of the new budget and the current state of the financial sector. Related storyLending slows as banks focus on recovery of loans at fiscal yea. . . The finance minister said the government was ready to listen to banks' concerns and take policy initiatives to resolve them. Questioning why credit growth has remained sluggish despite ample liquidity, he asked bankers to identify the obstacles preventing loan expansion. "If there are policy barriers the government needs to remove, tell us. We will facilitate them," Wagle said, urging banks to submit a consolidated list of regulatory and operational challenges. Bank executives, however, argued that the weak credit growth does not reflect a lack of investment opportunities. They dismissed claims that Nepal lacks an investment climate, saying the banking sector is dealing with regulatory constraints that can be addressed through policy reforms. Several CEOs said competition among banks to finance hydropower projects remains strong, while demand is gradually picking up in agriculture, construction and other productive sectors. Nepal Bankers' Association President and Machhapuchchhre Bank CEO Santosh Koirala called for additional government support to sustain investment in hydropower and urged authorities to complete major infrastructure projects on time to strengthen investor confidence. Citizens International Bank CEO Ganesh Pokharel described the current slowdown as part of a normal economic cycle rather than a structural crisis. "There is intense competition to invest in hydropower. The situation is not as weak as it appears from the outside. This is part of an economic cycle," he said. Global IME Bank CEO Surendra Regmi urged the government to restore business confidence and asked the Nepal Rastra Bank to introduce policy measures that would improve banks' lending capacity. He also expressed hope that the proposed asset management company for non-banking assets would be established soon. Other bank chiefs called for greater capital spending by the government, easier access to finance for small and medium enterprises, a review of loan provisioning rules, and reforms to blacklist regulations. They also pointed to rising non-performing loans, difficulties faced by banks that underwent forced mergers, and the growing burden of non-banking assets. The executives agreed that closer coordination between the government and the central bank would be key to reviving credit growth and putting Nepal's economy back on a stronger growth path.