On top of that, protests against banks and financial institutions (BFIs) since January have worried bankers. Various groups are on the streets calling for non-payment of loans and loan waivers. There have also been reports about BFI employees getting assaulted in some parts of the country.
According to Deputy Governor Bam Bahadur Mishra, the impacts of the country's economic problems and the incidents that have occurred recently were discussed with the bank CEOs. "By the end of the second quarter of the current fiscal year, NPLs of banks increased significantly and the third quarter is also ending soon. Protests against banks are also taking place. We discussed the ways to move ahead in this situation," he said. "However, the discussion did not reach any conclusion." Mishra started the meeting by presenting the current picture of the banking sector. The CEOs of all 20 commercial banks then presented their problems in turns, which was followed by the governor's speech. According to the bankers present in the meeting, Governor Adhikari did not offer any solution as to how to solve the current problems. "The issues were discussed for four hours. But there were no concrete words from the governor to come out of the situation," said a CEO of one bank. The governor tried to assure the bankers by telling them that there was no need to panic, as NPLs of banks in Nepal are still low compared to other countries. "Banks can return money to depositors even if they decide to withdraw all their deposit amount. The situation is not alarming even though the NPLs of banks have increased," Adhikari told the bankers. The bankers meanwhile asked for flexibility in the management of losses due to bad loans. They said the banks are not in a position to support borrowers from the current resources and the loan loss provision amounts are likely to increase further. They also urged the government to expedite spending to increase the flow of liquidity in the market. The bankers also asked the NRB officials for an alternative to raising the paid-up capital of banks. According to them, banks are still able to disburse loans easily on the basis of their capital levels. They demanded that banks should be able to increase paid-up capital through the issuance of rights shares and bonus shares. Governor Adhikari, however, did not address this issue. "His interest was in NPLs of banks. It seems the governor called this meeting just to boost our confidence,” said one bank CEO. “Nothing was promised."