KATHMANDU: Finance Minister Janardan Sharma has requested banks to accept land that is not connected to any road network as collateral while disbursing loans in remote areas of the country. He made this request during a meeting with the Governor of Nepal Rastra Bank and chief executives of various banks regarding the current economic situation of the country. The meeting was held at the Finance Ministry on November 12.
Minister Sharma mentioned that since banks disburse loans by accepting land that is connected to a road network as collateral many farmers had not been able to avail loans. He said that if the land is of agricultural value then there is no problem in accepting it as collateral.
The Minister also said that banks should now study if the sectoral loans are being provided as mandated. He mentioned banks themselves should also monitor in which sectors the borrowers have been investing their loans and prepare a report about it. If the banks are able to do so then it will help banks gauge whether or not their funds are being utilised in the productive sector.