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Monitory crisis in offing.

Commercial banks have increased interest rates to attract deposits as they have seen liquidity crunch in the offing. The Banks had expected liquidity flow after the elections. Money came in the market during the elections but that money didn't reach to the Banks as expected. This means, the monitory market is beyond the reach of the commercial banks or the monetary market is dominated by the illegal institutions. Secondly, the government is unable to spend the budget allotted for development projects. The money received by the taxpayers has piled up in the reserve bank but the market is facing liquidity crunch. If the government fails to spend the budget allotted for the development projects, the commercial banks are to face acute liquidity crunch soon. After the Court's approval for repatriation of the share profit to Ncell, the company may take back 72 billion rupees deposited in different commercial banks. Furthermore, by mid-January, tax payers withdraw deposits from commercial banks to pay income tax to the government. This will further intensify liquidity crunch in the commercial banks.

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Publication:People's Review (Kathmandu, Nepal)
Date:Jan 7, 2018
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