Will the present acute shortage of lendable funds in Nepalese Banking sector end soon? Green Signal from Nepal Rastra Bank to bring in 82 arba funds from foreign lenders
Wed, Apr 4, 2018 7:36 AM on Latest, Featured, Economy, External Media,
At the time when the banking sector of the nation is reeling under the acute shortage of lendable funds, Nepal Rastra bank has made it possible for the 28 commercial banks to obtain loans from the foreign lenders upto 25% of their Primary capital. With this new regulation coming into effect from the Foreign Exchange Management Department of NRB, it has been now possible for these commercial banks to bring Rs 82 arba worth of investable funds from the foreign investors into the banking channel as the investable credit.
The mid-term review of fiscal situation of the nation had showed that the commercial banks jointly have Rs 3.28 kharba out of which 25% or Rs 82.12 arba can be immediately brought into banking channel in form of foreign loans.
Agriculture Development Bank which as the highest Primary capital of Rs 22.86 arba is eligible to bring in the highest volume of foreign loan as per the latest provision. ADB is followed by other blue chip banks namely Nepal Investment Bank, Nabil Bank and Everest Bank. on the other hand, NCC Bank which has the lowest primary capital of Rs 7.59 arba will be in disadvantaged side in this regard.
Following their respective primary capital value, ADB can bring in the highest amount of foreign loans of upto Rs 5.71 arba which is followed by Nepal Investment Bank’s Rs 5.13 arba. NCC Bank which has the lowest of the primary capital can only bring in the foreign loans of Rs 1.90 arba as per the data available until the end of second quarter of the FY 2074-75.
The central bank has however set the clear regulation to prevent the misuse of the funds brought into the banking channel from such lenders. As per the provisions, the banks cannot extend such funds as credits to the sectors like housing and real state, share market and others which have been recognized as unproductive by the Rastra Bank and have to spend them in prioritized sectors such as hydropower, agriculture, microfinance, infrastructure development and alike.
| Paid-up | Reserve | Core Capital | Foreign Loan Capacity 25% of Core Capital | |
|---|---|---|---|---|
| Commercial Bank | Rs in Arba | |||
| ADBL | 13.94 | 8.92 | 22.86 | 5.715 |
| NIB | 10.63 | 9.91 | 20.54 | 5.135 |
| NABIL | 8.04 | 7.86 | 15.9 | 3.975 |
| EBL | 8.13 | 5.19 | 13.32 | 3.33 |
| NBL | 8.04 | 5.05 | 13.09 | 3.2725 |
| SCB | 8.01 | 4.87 | 12.88 | 3.22 |
| HBL | 8.11 | 4.7 | 12.81 | 3.2025 |
| RBB | 8.59 | 3.68 | 12.27 | 3.0675 |
| GBIME | 8.89 | 3.37 | 12.26 | 3.065 |
| SBL | 7.95 | 4.1 | 12.05 | 3.0125 |
| SBI | 8.05 | 3.69 | 11.74 | 2.935 |
| NMB | 6.46 | 5.23 | 11.69 | 2.9225 |
| PRVU | 8.23 | 3.11 | 11.34 | 2.835 |
| BOKL | 6.25 | 4.9 | 11.15 | 2.7875 |
| NBB | 8.09 | 2.79 | 10.88 | 2.72 |
| NICA | 8.03 | 2.66 | 10.69 | 2.6725 |
| SRBL | 8.15 | 2.1 | 10.25 | 2.5625 |
| PCBL | 8.03 | 2.12 | 10.15 | 2.5375 |
| LBL | 8.22 | 1.89 | 10.11 | 2.5275 |
| CZBIL | 8.03 | 2 | 10.03 | 2.5075 |
| SANIMA | 8 | 1.88 | 9.88 | 2.47 |
| CCBL | 8.06 | 1.76 | 9.82 | 2.455 |
| MBL | 8.06 | 1.45 | 9.51 | 2.3775 |
| JBNL | 8 | 1.07 | 9.07 | 2.2675 |
| MEGA | 7.38 | 1.68 | 9.06 | 2.265 |
| CBL | 7.26 | 1.74 | 9 | 2.25 |
| KBL | 5.97 | 2.59 | 8.56 | 2.14 |
| NCCB | 4.68 | 2.91 | 7.59 | 1.8975 |
| Grand Total | 328.5 | 82.125 | ||
