Himal Press 
KATHMANDU: Minister for Finance Swarnim Wagle has questioned why credit demand has remained weak despite lending rates falling to among their lowest levels in recent years. saying the issue reflects deeper challenges facing Nepal’s economy.
Speaking at a meeting with the chief executive officers of all 20 commercial banks at the Ministry of Finance on Tuesday, Wagle expressed concern over the lack of growth in private sector borrowing despite historically low interest rates. He also asked why businesses had remained reluctant to invest and why excess liquidity in the banking system had not translated into productive investment.
“The question is whether the solution lies in monetary policy, fiscal policy or restoring private sector confidence,” he said.
Describing commercial banks as the meeting point for savers, entrepreneurs, farmers, industrialists, investors and aspiring business owners, Wagle said bankers were best positioned to understand the economy’s real sentiment and the confidence of investors.
The finance minister also said reviving the economy would require coordinated efforts by the government, the central bank and the banking sector to restore business confidence and boost investment.
He said the government had set a clear direction for economic transformation through the budget and was now focused on implementation. “The immediate priorities of the government are increasing investment, expanding production, creating jobs and rebuilding private sector confidence,” Wagle said. “Although the government is pursuing regulatory, legal and institutional reforms, it is necessary to assess whether those measures are sufficient.”
Wagle also sought suggestions from bank CEOs on structural reforms needed to increase lending to productive sectors, possible changes to monetary policy, banking regulation and supervision, and ways to strengthen coordination among the Ministry of Finance, Nepal Rastra Bank and commercial banks.
He said the government wanted the discussions to produce concrete solutions, implementation timelines and clearly defined responsibilities rather than simply identify problems.
“Where legal reforms are needed, we will amend the laws. Where procedures are the problem, we will change the procedures. Where institutional coordination is required, we will strengthen coordination. And where government decisions are necessary, we will not hesitate to take them,” he said.
