He said that the central bank was also drawing a line between banks´ promoters and entrepreneurs so as to force them maintain due distance. Citing that NRB was taking new steps to inculcate discipline in the banking sector, Dr Khatiwoda further said that the central bank now would not grant permission for opening bank just because one has capital. [break]
"We will study the background of the promoters as well and give due weight to it while taking such decision," he said.
Dr Khatiwoda, who was in the industrial hub in the eastern region to interact with the business community, shared his recent experience of talking with a group of businessmen, who had visited his office complaining banks were charging unbearably high interest rate.
"Interestingly, some of the members in the business delegation that asked me to reduce lending rates were bank promoters themselves. And I could not understand who was complaining against what," he said. In this context, he also asked banks to maintain a good distance with businessmen and function professionally.
During the interaction, entrepreneurs of eastern region had urged NRB to stop entry of new banks in order to end long-running liquidity problem. However, Dr Khatiwoda did not agree with them.
"We cannot check expansion of banks and financial institutions in the rural areas," he said. As for liquidity crunch and other problems seen in the banking system, he said the central bank was serious toward addressing them soon.
Citing recent rise in deposits mobilization, Dr Khatiwoda was upbeat about the liquidity crunch ending soon. As for ending the shortage of Indian currency (IC) in the market, he said NRB has already mobilized its regional offices to generate a list of items that are being traded across the border informally. Dr Khatiwada informed the businessmen that the central bank has IC reserve of 35 billion.
Entrepreneurs, however, complained that the banks in India have presently stopped issuing payments against debit cards. Sources said the Indian banks have taken such step after NRB requested them not to pay them mainly as it has been fostering black market of IC.
Related story
Revised interest rate corridor system introduced
