BFIs should facilitate businesspeople in times of trouble: Governor Adhikari

KATHMANDU: Nepal Rastra Bank Governor Maha Prasad Adhikari has called on banks to extend facilitation to businesspeople when they face difficulties, emphasizing the importance of understanding their challenges. Speaking at an event organized by the Economic Media Society Nepal (EMSON) to welcome the newly elected executive committee of the Nepal Bankers Association, Governor Adhikari urged banks to provide support, particularly when entrepreneurs experience setbacks in their ventures.

Adhikari highlighted that entrepreneurs often invest significant capital and effort into starting their businesses, and when problems arise—whether due to unforeseen circumstances or changes in their business plan—it is essential for banks to facilitate solutions. “When an entrepreneur is running a business, they invest considerable time and resources. However, due to various reasons, such as unforeseen challenges or a change in the business environment, they may find themselves facing difficulties. In such instances, banks must facilitate the process to help solve the problem,” the governor explained.

He stressed that, instead of taking a punitive approach such as blacklisting struggling businesses, banks should offer technical and financial assistance to help resolve issues. “Rather than labeling businesspeople as defaulters, the banking sector can play a significant role in supporting them by providing the necessary facilitation. Offering technical and financial assistance to those facing issues will lead to better outcomes and help businesses bounce back,” Governor Adhikari remarked.

The governor also urged the banking sector to remain mindful of its position as a sensitive industry. He pointed out that the media’s portrayal of the sector can significantly influence its reputation and functioning. “The banking and financial sector is a highly sensitive domain. Negative news or issues can have a considerable impact, not just on the banks but on the entire economy. It is crucial for the media to handle such subjects with responsibility, as the way these issues are raised and presented can influence public perception,” he said.

In addition, Governor Adhikari stressed the importance of improving communication within the banking sector, particularly between bank staff and consumers. He pointed out that enhancing communication skills among bank staffers is key to building better cooperation with loan takers and ensuring smoother interactions. “Bank staff must enhance their communication skills to ensure better cooperation with borrowers. Clear and transparent communication can lead to a better understanding between the bank and the loan recipient, fostering trust and collaboration,” he said.

He further suggested that improving the way loan information is communicated could help businesses better navigate their financial challenges. When borrowers fully understand the terms and conditions of loans, it increases the likelihood of successful repayment and a positive outcome for both parties.

Governor Adhikari’s remarks come at a time when businesses, especially small and medium-sized enterprises (SMEs), are facing numerous challenges due to economic uncertainties. Providing a supportive environment through facilitation rather than punitive measures could help these businesses recover more quickly and contribute to the country’s overall economic growth.

He concluded by reiterating the critical role of the banking sector in maintaining economic stability and ensuring sustainable growth. He urged the sector to remain committed to helping entrepreneurs overcome obstacles and succeed in their ventures, benefiting the broader economy.

Speaking at the program, Santosh Koirala, Chairman of the Nepal Bankers Association and CEO of Machhapuchchhre Bank, assured that banks are doing their best to protect debtor and comply with the regulations set by Nepal Rastra Bank (NRB) to maintain financial stability. He also addressed recent false claims circulating among some individuals who are spreading misinformation that Nepal’s banking system is on the brink of collapse. Koirala strongly refuted these claims, stating that such statements are entirely unfounded and inaccurate.