Himal Press 
KATHMANDU: Nepal Rastra Bank (NRB) Governor Dr Biswo Nath Poudel has said that loan disbursement by banks and financial institutions is becoming increasingly concentrated, with a significant portion of total loans going to a limited number of individuals or groups.
During a discussion on the Bill to Amend the Bank and Financial Institutions Act, 2016 (BAFIA) in the meeting of the Finance Committee of the House of Representatives on Monday, Poudel said 0.01% out of 1.94 million borrowers account for 3.9% of total loans disbursed by banks and financial institutions. “This indicates that a large amount of credit has flowed to a few individuals,” he said. “Whether these loans contribute positively to production is a concerning issue.”
Governor Poudel added that the amendment to BAFIA aims to distinguish between bank directors and businesspersons, as well as identify individuals with significant ownership and those associated with banks. He expressed confidence that the amendment would clarify the extent to which bank directors can or cannot take loans.
Similarly, NRB Executive Director Guru Prasad Poudel said that the amendment is necessary because the existing BAFIA does not cover digital banking.
The bill under consideration in the committee includes provisions to provide legal recognition for digital currency and digital banking, clarify the responsibilities of bank directors, discourage the practice of major shareholders taking large loans from their own banks and other related issues.
