BFIs seek govt intervention to prevent possible manhandling of their staff

Published On: March 2, 2023 08:45 PM NPT By: Republica | @RepublicaNepal

BFIs facing increasing criticism due to exorbitant interest rates and anomalies seen in microfinance

KATHMANDU, March 2: Banks and financial institutions (BFIs) have drawn the government’s attention toward the menace that they have been sustaining from various sectors at present.

Issuing a joint press statement on Thursday, Nepal Bankers’ Association, Development Bankers Association Nepal, Nepal Financial Institutions Association and Nepal Microfinance Bankers’ Association said that the bankers in the country have been facing negative comments and threats every now and then these days. The umbrella organizations of the BFIs have urged the government to take measures to prevent the possible manhandling of banking staff.

In recent times, the general public and business community have expressed their anger over the steep rise in the prices of essential goods and services, as well as the exorbitant interest rates being charged by financial institutions. Moreover, microfinance companies have faced criticism for burdening their borrowers with heavy loan repayments, further fueling negative sentiment towards financial institutions. Additionally, several entrepreneurs have made public statements about their refusal to pay interest to these institutions.

It is the utmost responsibility of borrowers to pay back the principal and interest to the BFIs. However, it is an extreme anarchism to refuse directly to settle the financial liabilities, reads a joint press release issued by the umbrella organizations of the BFIs.

According to the bankers, the BFIs have mobilized around Rs 54 billion via more than 43.3 million bank accounts while they have provided loans to more than 1.8 million borrowers. The sector is providing direct employment to more than 53,000 individuals while paying Rs 34 billion in taxes to the government in 2021/22.

BFIs waived the loan interests of over Rs 10 billion to their debtors during impacts of the COVID-19 pandemic. “In this context, it is the first duty of the borrowers to pay the installment dues on their loans,” reads the press statement.