Nepal Rastra Bank (NRB) Governor Dr Yuba Raj Khatiwada has warned commercial banks not to siphon off rural money to urban areas.
He also said commercial banks were using their branches in rural areas as mere deposit collection center.
Khatiwada has been advocating for financial service for the unbanked population ever since he assumed office at the central bank. He even introduced a policy to serve the credit demand for rural areas by increasing deprived sector lending limit for A,B and C class financial institutions through monetary policy.
Inaugurating the ´Trainers Training on Development of Rural Financing Institutions and Cooperatives´ program - a South Asian level regional training program - in Bhaktapur on Monday, Khatiwada said financial sector plays a key role in involving people in production process by providing them funds.
Saying that BFIs can redistribute resources without extorting or seizing anybody´s property, Khatiwada said access to finance is a key factor for inclusive growth. “BFIs, cooperatives and micro finance institution (MFIs) can be the agents for redistribution of financial resources,” the governor stated, adding, “They collect money from the depositors and redistribute it to borrowers. Social revolution is not needed for redistribution of resources.” He also hailed the role of MFIs and cooperatives in the development of rural areas.
Comparing the data of clients served by the BFIs and cooperatives, Khatiwada said cooperatives and MFIs are serving larger number of people compared to BFIs.
According to the data, 2.3 million people are the promoters in 12,916 saving and credit cooperatives. Similarly, commercial banks have only around 18,000 promoters.
“One hundred big borrowers of commercial banks have taken as much as the total borrowing made by members of saving and credit cooperatives,” Khatiwada said. He also said the existing collateral-based lending process is the major barrier to expand loan through commercial banks in rural areas.
The governor said South Asian countries have the worst economic democracy. “South Asian people have been facing problems to exercise their political rights because they don´t have the economic strength to exercise their rights,” added Khatiwada.
The five-day training program is being organized by the Center for International Co-operation and Training in Agricultural Banking (CICTAB) India in association with Nepal Ratra Bank, Agricultural Development Bank, Rastriya Banijya Bank, Sana Kisan Bikas Bank, National Cooperatives Development Board (NCDB), and Nepal Federation of Saving and Credit Cooperative Unions (NEFSCUN).
As many as 32 delegates from different South Asian nations are participating in the program.
source: republica,14 april 2014
LINK
He also said commercial banks were using their branches in rural areas as mere deposit collection center.
Khatiwada has been advocating for financial service for the unbanked population ever since he assumed office at the central bank. He even introduced a policy to serve the credit demand for rural areas by increasing deprived sector lending limit for A,B and C class financial institutions through monetary policy.
Inaugurating the ´Trainers Training on Development of Rural Financing Institutions and Cooperatives´ program - a South Asian level regional training program - in Bhaktapur on Monday, Khatiwada said financial sector plays a key role in involving people in production process by providing them funds.
Saying that BFIs can redistribute resources without extorting or seizing anybody´s property, Khatiwada said access to finance is a key factor for inclusive growth. “BFIs, cooperatives and micro finance institution (MFIs) can be the agents for redistribution of financial resources,” the governor stated, adding, “They collect money from the depositors and redistribute it to borrowers. Social revolution is not needed for redistribution of resources.” He also hailed the role of MFIs and cooperatives in the development of rural areas.
Comparing the data of clients served by the BFIs and cooperatives, Khatiwada said cooperatives and MFIs are serving larger number of people compared to BFIs.
According to the data, 2.3 million people are the promoters in 12,916 saving and credit cooperatives. Similarly, commercial banks have only around 18,000 promoters.
“One hundred big borrowers of commercial banks have taken as much as the total borrowing made by members of saving and credit cooperatives,” Khatiwada said. He also said the existing collateral-based lending process is the major barrier to expand loan through commercial banks in rural areas.
The governor said South Asian countries have the worst economic democracy. “South Asian people have been facing problems to exercise their political rights because they don´t have the economic strength to exercise their rights,” added Khatiwada.
The five-day training program is being organized by the Center for International Co-operation and Training in Agricultural Banking (CICTAB) India in association with Nepal Ratra Bank, Agricultural Development Bank, Rastriya Banijya Bank, Sana Kisan Bikas Bank, National Cooperatives Development Board (NCDB), and Nepal Federation of Saving and Credit Cooperative Unions (NEFSCUN).
As many as 32 delegates from different South Asian nations are participating in the program.
source: republica,14 april 2014
LINK
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