Central bank governor Dr Yuba Raj Khatiwada has asked the commercial banks not to siphon off rural money to urban areas.
The commercial banks are using their branches in rural areas to mobilise more deposits but lend in the urban sector, he said, inaugurating the ‘Trainers Training on Development of Rural Financing Institutions and Cooperatives programme in Bhaktapur today.
Though the financial sector plays a key role in involving people in production process by providing them funds, they mobilise deposits and redistribute it to to the borrowers, he said, adding that social revolution is not needed for redistribution of resources, if the banks and financial institutions work as they can can redistribute resources without extorting or seizing anybody´s property. “Access to finance is a key factor for inclusive growth.”
Banks and financial institutions, cooperatives and micro finance institution (MFIs) can be the agents for redistribution of financial resources, the governor said.
Hailing the role of micro finance institutions and cooperatives in the development of rural areas, Khatiwada said they are serving larger number of people compared to banks.
The five-day in the South Asian level regional training programme is being organised by Center for International Co-operation and Training in Agricultural Banking of India in association with Nepal Ratra Bank, Agricultural Development Bank, Rastriya Banijya Bank, Sana Kisan Bikas Bank, National Cooperatives Development Board and Nepal Federation of Saving and Credit Cooperative Unions.