Banks face cash shortage in TaraiBank branches in the Tarai region have started to face a shortage of cash as the delivery of the ready money has been disrupted due to prolonged strikes.
Bank branches in the Tarai region have started to face a shortage of cash as the delivery of the ready money has been disrupted due to prolonged strikes.
Nepal Bankers’ Association (NBA) President Upendra Poudyal said there were reports about the cash crunch in a few Tarai districts.
Confirming the shortage, Sanima Bank Chief Executive Officer Bhuwan Dahal said: “At some of the Tarai branches, we are addressing the shortage through cash injection from other banks.”
According to the bankers, the shortage would have been acute had the demand been normal. However, due to continued bandas and curfew, the demand for cash has been low, while the branches remain largely closed although the staffers attend the office.
Rasriya Banijya Bank (RBB), which has 18 branches in eight Tarai districts facing unrest, said banking transactions have remained almost nil. “Some branches along the highway are witnessing limited transactions,” said RBB CEO Krishna Prasad Sharma.
Meanwhile, the latest decision of the agitating Madhes-based parties to shut down banking institutions has terrified the bankers and they have sought the Nepal Rastra Bank’s (NRB) guidance.
According to NBA, it has sent a letter to the central bank seeking its guidance on the operation of banking institutions in Tarai after the decision of the Samyukta Loktantrik Madhesi Morcha.
Some bankers say they have stated to receive threats to shut down their branches, while others have complained about demand for donations.
Poudyal said branches based in Gaur and Lahan have received threats to shut down. “Therefore, were have sought the central bank’s guidance,” he said.
The bankers said they have not yet sought special security, but were concerned about the safety of their staffers.
The bankers are also concerned about the impact of the banda on industries, which has resulted in non-payment of instalments. Poudyal said NBA has also drawn the central bank’s attention towards the fact that the borrowers are not being able to pay instalments and interests.
Private sector bodies have complained they are facing huge losses due to the prolonged strikes as factories have remained closed.
According to Dahal, loan default risk has increased sharply. “The defaults rate could jump this year as businesses have been affected by both the April 25 earthquake and Tarai unrest,” he said.
The bankers said they have also sought the NRB’s approval for adjusting transactions made in the fourth month of the fiscal year in the first quarter report.