“The lending rates have gone up because people earning money from illegal means have preferred to keep their money at home. This has hurt genuine businesses,” said Dr Khatiwada, referring to the latest anti-money laundering policy, which seeks depositors of cash worth Rs 1 million to disclose the sources of income.[break]
As the problem created by wrongdoers can be fought by bringing more genuine earners in the banking system, Khatiwada tried to lure businessmen to the system by saying that the law is meant for the wrongdoers and people who have earned money genuinely need not worry.
“If businessmen and general public want the lending rates to go down, they should save their money in banks. This is the correct practice of safekeeping money as well,” he said, addressing a function organized to mark the fourth general convention of Market Distributors´ Association of Nepal that kicked off here on Friday.
Earlier, speaking on the occasion, Mahesh Jaju President of Morang Trade Association alleged the banks of raising lending rates arbitrarily, affecting their operations. He also asked the central bank to announce new measures to relieve the entrepreneurs.
In a separate program, Dr Khatiwada again appealed to the people to take care of notes they have in possession and exchange those properly. Addressing a program on ´Clean Note Policy and Identification of Fake Notes´, he expressed concern over the habit of the people to scribble on banknotes, as it has been soiling the notes just within three months of circulation, inflicting unnecessary cost to the central bank.
“Poor handling by people has sharply reduced the life of Nepali notes. People unfortunately don´t realize that it is their own (taxpayers´) money that is used to print fresh notes,” Khatiwada added.
According to NRB, the average life of Nepali notes presently stands at just over a year, but notes on which people write becomes unusable in just three months.
The governor further elaborated that the central bank has embarked on a clean note policy to remove old notes from the market. “We will also withdraw notes with kings´ portrait from the market,” he added.
He also requested the banks not to re-circulate notes with kings´ portrait in the market. “If you (banks) possess such notes, you must forward them to the central bank,” he said, appealing to both the banks and public to exchange such notes by mid-March 2011.
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