By A Staff Reporter, Kathmandu, Jan. 24: Finance Minister Dr. Yuba Raj Khatiwada Friday urged the banks and financial institutions to focus on quality loan disbursement instead of expanding only the loan volume.

 “The banks should focus on increasing investment in the productive sector which contributes to expanding the Gross Domestic Products (GDP).  A situation to fix the ceiling of credit will arise if we cannot increase productivity even by expanding the volume of credit flow,” he said while speaking at the 55^th anniversary of Rastriya Banijya Bank Limited today.

Investment should be expanded which helps increase economic activities and supports for achieving the higher economic growth, he said.

He said that no space would be created to expand loans by providing loans only in the unproductive sector.

 Stating that the Nepali banking sector has improved over the years, he said that there was still a chance for the BFIs to go for merger to make the institution stronger and more competitive.

The quality of institution is important instead of their numbers for the betterment of banking sector, he said.

“I assure you that the government is ready to support those banks and financial institutions which want to go for merger,” said FM Khatiwada.

The banks should encourage the depositors to bring their savings in the banks, he said, adding that the banks should also provide loan to the creditors at a reasonable interest rate.

“We have directed the BFIs to maintain the spread of interest rate which is mandatory,” Dr. Khatiwada said.

He said that he discussed with the bankers to provide long-term loan at the fix interest rates for the overall economic development of the country.

Stating that the banking sector was facing challenges in security, he urged the BFIs to increase their investment in the information technology to overcome the threats seen in the banking sector.

Appreciating the performance of the RBB, he said that the RBB should move ahead by adopting the latest technologies to compete in the growing banking sector.

Deputy Governor of Nepal Rastra Bank Chintamani Siwakoti said that the role of the RBB would be vital for the economic development of the country as it was getting strengthening in terms of capital and network.

Chief Executive Officer of RBB Kiran Kumar Shrestha said that the RBB had been investing in the productive sector, including agriculture, hydropower, tourism and industrial sectors with priority.

He expressed his commitment to providing secure and reliable banking services to the people by adopting the modern technologies.

The bank has been providing banking services through  its 238 branches being operated in  all 77 districts of all seven States, he said.

Currently, the bank has about 3.3 million depositors and 168,000 creditors.

Under the national campaign to open the bank accounts of all Nepalis, RBB has opened around 9,614 new bank accounts.