According to the NRB, commercial banks have already lent Rs1,952 billion of their Rs 2,207billion deposits. This means people can still withdraw their money from banks, but there isn’t enough capital for new loans.
Pashupati Murarka, ex-President of the Federation of Nepalese Chambers of Commerce and Industry, puts it bluntly: “The banks have all closed their doors to investors.”
As the credit crunch drags on, banks and the government are engaging in the usual mutual blame game. The government blames bankers for creating the problem themselves by releasing loans in unproductive sectors like real estate, automobiles and capital market.