Flow of Loan in Unproductive Sector Diminishing

June 12: The loan investments in unproductive sectors specified by the Nepal Rastra Bank (NRB), has started to come down now, only after a long time of being directed by the NRB.

The Macro Economic Report of the first 10 months of the current FY 2016/17 unveiled by NRB recently shows that the flow of loan has been decreased by Rs 90 million from mid- April to mid-May as compared to mid-March- mid-April in the current FY.

 Although the NRB had directed the banking and financial institutions (BFIs) to decrease the loan on these sectors, such as overdraft, real estate loan (including personal housing loan), hire purchase, share margin loan as unproductive sector, the statistics shows that the flow of loan is higher by Rs 133.02 billion as compared to the first 10 months of the previous FY.

In the one month period from mid-March to mid-April in the current fiscal year, the flow of loan on unproductive sector was Rs 8.27 billion, which came down to Rs 8.26 from mid-April to mid-May. As per the statistics of NRB, though the total flow of loan seems to increase, share margin loan has decreased by Rs 30 million or 0.77 percent.

Nara Bahadur Thapa, Executive Director of the Department of Research of NRB, informed that as the sudden decrease of flow of loan might create troubles in market, they have requested the BFIs to decrease the flow of loan in this sector to maintain financial discipline eventually.