Banks are not in the state of drown - Bhuwan Kumar Dahal, Chairman (NBA)

Oct Fri 2020 12:03:22


Banks are not in the state of drown - Bhuwan Kumar Dahal, Chairman (NBA)

Banks' profits are expected to decline further due to the Corona epidemic. Not only that, the general public is beginning to be concerned and worried that the banks may go bankrupt. However, the corona epidemic has had some positive effects on banks. Banks have more liquidity but NRB is also taking initiative to manage it. Regarding the interest shown by the general public in the banking sector, Chairman of the Bankers' Association Bhuvan Kumar Dahal said that the banks are not in a position to go bankrupt due to losses of Rs 2/4 billion.  Bhuwan Kumar Dahal

If we look at the size of deposits and loans with banks, the growth rate of deposits is much higher than the growth rate of loans. That is why the government is drawing some surplus funds from the banks. NRB is also trying to pull something off.

However, banks have an average idol fund of around Rs 200 billion. We are paying around Rs 200 billion in interest on deposits. And, being able to earn income has a direct impact on the income of banks. Decreased economic activity means lower bank income. Overall, with a few exceptions, net interest income of most banks has declined. Fee income has decreased. Foreign exchange earnings have also declined. Overall profit has declined. It also decreased last year, this time it has also decreased in the quarterly. But some banks may be better off.

NRB is playing the role of supervisor as well as facilitator. Complaints of business friends are that it has become difficult to do business, the label of business has decreased, we are not able to sustain it.

There is a fear that depositors will face difficulties when banks are not sustainable. There is no need to worry about that. Looking at the capital fund of banks in Nepal. Banks have more than 13 percent of the capital at 8.5 percent.

If the glue is up to Rs 13, the depositor's money will not sink. Banks are in a very good position in terms of capital. They have enough capital. Banks are not in a position to sink due to 2/4 billion deficit. NRB had already introduced a policy of keeping capital surplus.

It is not impossible to support the economy. If business friends need more loans, there is money available for additional loans. If you say low interest, there is also low interest. So now we are lucky, the condition of the banks is very good. Has the ability to withstand some losses. Even the smallest bank has a capital of Rs 10.11 billion. Even if there is a loss of Rs 10/11 billion, these banks can afford it.