Kathmandu: Santosh Koirala, president of the Nepal Bankers’ Association, has said that while Nepal’s banking system is currently holding a large volume of deposits, the pace of loan expansion remains weak. Speaking at the 36th anniversary of the Citizen Investment Trust, he noted that banks have mobilized around Rs7.7 trillion in deposits but have only extended about Rs 5.8 trillion in loans.
Koirala pointed out that credit growth has not picked up in recent months, describing the period as increasingly challenging for the banking sector. He also highlighted growing risks faced by bank staff during loan recovery efforts, including threats and pressure from borrowers.
He warned that a dangerous narrative suggesting loans do not need to be repaid is beginning to emerge in some quarters. “There are many risks when going out to recover loans,” he said, adding that if such a mindset spreads—encouraging people to believe they can avoid repayment—it could have serious consequences for the broader economy.
Koirala further expressed concern over incidents where bank employees have faced public harassment, including acts such as smearing black soot on their faces or forcing them to wear garlands of shoes. Such behaviour, he cautioned, not only undermines financial discipline but also poses long-term risks to Nepal’s economic stability if left unchecked.
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