Kathmandu, Jan 20: Deputy Prime Minister and Minister for Finance, Bishnu Prasad Paudel, has said it is concerning that the loan investment could not increase as expected.
In his address to a programme organised here today, marking the 58th anniversary of the Agricultural Development Bank, Nepal (ADBN) here today, the Minister said of late, deposit collection in banks are encouraging, but it is worrisome that loan disbursement has not increased as expected.
He advised banks to explore strategies for increasing loan growth, which would contribute to enhancing production, productivity, and job creation.
Finance Minister Paudel also instructed the ADBN to function with a more professional and competitive approach, focusing on cordial and professional relations between the management and employees.
He stressed that achieving of the bank’s founding objectives should be the topmost priority of all people concerned.
Also speaking on the occasion, Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari said country’s economic and financial indicators are improving and the economy has revived back on track. “However, banks are facing some issues in loan recovery.”
He said the external sector of the economy is stable and despite some pressure in the management of inflation due to disaster, in overall the situation is within the expected limit.
Banks are enjoying sufficient liquidity and the interest rates have dropped. He also utilized the time to say that the government revenue collection has increased compared to the last fiscal year, and both imports and exports are on the rise. “So we need to be discouraged. We have many positive sides to note,” he added.
Governor Adhikari also praised the ADBN’s management and efficiency as being the best, saying the Bank has been leading the investments in the agricultural sector in Nepal.
He said the ADBN has the major contribution in terms of the investment in the agriculture sector through the banking system. He said that the bank has been doing well in promoting financial inclusion, green finance and technology use.
Chairman of ADBN’s Board of Directors, Ram Sharan Pudasaini, said proper adherence to the prevailing laws and directives of regulatory bodies, risk management, effective internal control system and maintaining the quality of credit have been given top priority for a sustainable banking and financial stability.
According to him, the Bank has paid special attention to business expansion and quality service delivery by means of modern banking facilities, institutional good governance, and maximum use of information technology in a secured way and investment-friendly policy, among others.
The Agricultural Development Bank was established on January 21, 1968 with an authorized capital of Rs 50 million with the main objective of supporting the development of rural and agricultural sectors of Nepal.
The Bank has been providing easy and convenient loans for the development of agriculture and agro-based industries and for agriculture modernization, industrialization, mechanization and commercialization.
At present, 51 per cent of the bank’s ownership is with the government and 49 per cent with the general public. It has disbursed loans of approximately 206 billion to 151 thousand borrowers. Similarly, the Bank is mobilizing Rs 259 billion deposited by around 2 million 34 thousand depositors.
The authorized capital of the bank is Rs 25 billion and the issued capital Rs 19 billion 286 million 451 thousand 300.
Similarly, the bank’s capital fund is in a strong position. The capital fund ratio stood at 13.14 per cent as against 13.75 per cent last year.
The number of share-holders of the Bank is around 300 thousand at present.
Bank’s spokesperson and company secretary Himlal Poudel said the bank plans to reduce the funding cost, cut expenditure, maintain minimum operating expenses, reduce non-performing loans and bring in new and qualified manpower from the market in the coming days.
