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Liquidity crisis past Vs present

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Registered: Oct 2013
Posts: 7508
Economic analysis and prediction.

1: I was planning, to tell the bitter truth when NRB reverses liquidity and 4/12 policy that "NRB made a right decision before too late, even though 10s of billions of losses our economy have already gone through". But it did not happen.... You know what I mean right....... Now wait for the ocean to burn if they dont reverse their decision.

2: During previous liquidity/interest rate crisis, which I predicted and gave them solution, which they did not accept.

Then I predicted, how liquidity crisis would end.... it ended exactly like predicted. I said, due to bad NRB policy, economy will suffer and liquidity would ease. And exactly it happened like that. .... and later corona came then there was plenty of liquidity. That time, liquidity crisis was created by over investment in so called productive sector like construction based industry like iron, cement..... and hotel, hydro etc. When investment in those sector decreased, liquidity problem ended. The liquidity problem was made worse by NRB that time.

Years back, we talked in this forum about change in variables would change the out come in the economy when major factor remain same.

This time, variable has changed. Actually, its not just small variable, its one of the major factor.

And by analyzing, NRB's interview, they want to fix things by crashing the economy. But this is not like before.

This time, liquidity crisis is created by NRB policy and govt not spending and import and lack of export. NOT over investment or high loan.

There is are few huge involvement of valuables this time. One is corona created economic risk and another is a secret. There could be others, I still have not figured it out.

This time, this liquidity crisis wont lead to just lowering of investment, it will create huge economic disaster which will lead to huge NPL and NPL will create even worst liquidity crisis than current one. I REPEAT, NRB POLICY WILL LEAD TO HUGE NPL.

To solve the problem, govt will have to inject 100s of billions into the system, which wont happen under pakhe rule.

3: Instead of fixing the problem, by reversing policy- liquidity, 4/12...... NRB will go for blame game and micro management. Which will create even bigger problem.

Loan- country should give loan to those who has capacity to take risk- provide collateral.
Borrower- those should borrow who can pay back and have guts.

But instead, govt, NRB, society going for micro management in lending. They say, who should take loan and who should not and who should get how much loan.

It does not work like that.

Only borrower knows, the most. Not some loser in govt or society.

There are already, losers, failures who destroyed Nepal (bureaucrats) supporting NRB policy in the media. So called dogo, ex bureaucrats, fake experts of dalal congress also support bad policy.

Things will only get worse.

Same faces who were behind previous liquidity crisis, economic crisis, who destroyed Nepal (civil servant) are supporting bad policy. Sati ko sarap.

Only I know economics in Nepal. And you are not "I".

Because of NRB, village idiot FM, retard PM............ world has already began to burn.

Pake le des chalaune haina.

I would add more analysis and prediction when I remember more or notice.
Registered: Oct 2013
Posts: 7508
Before NRB changed monitory policy, we had two major problems- govt not spending enough and import.

NRB's bureaucrats' hate for share market pushed monitory policy change which created problems every where.

Then to fix those problems, instead of reversing their policy, they went for micro restrictions. And things got worse.

All nonsense talk start about what created problem. Change in monitory policy reduced liquidity available by few hundred billions. And they started to point at something else.

Following is the clear point which proves, how dumb NRB bureaucrats are- Few years back, NRB pushed debenture to create liquidity. They said, 100% debenture can be used to give long. When monitory policy was changed, they banned debenture from being used to give loan (I dont know, if it is still band or not, I think, they may have reversed it.)

What happens when NRB pushes policies one by one which reduce the liquidity availability. And blame liquidity crisis on somebody else.

Its so hard to tell, if bureaucrats at NRB are dumb like dog or its some kind of political hit on this govt.

All this started when hate for share market began. When governor was positive about share market, thing were going smoothly even when we had corona.

As soon as governor became negative, sh!t began to hit the ceiling.

When we have pro share market finance minister, there is positive vibe in the economy. As soon as anti share market finance minister enters, every thing goes towards wrong direction.

There is no liquidity problem in Nepal, all liquidity crisis started when NRB changed monitory policy which happened as soon as new anti share market finance minister came.

This is not the first time. When we had pro share market FM, bishnu paudel, even during corona, economic sentiment was positive.

When yuraj K was FM, even when there was no corona, it was hell. Cause he as anti share market.

Not just in govt, even in bfis, when they have anti share market CEO or Bank that hates share market, suffer. SBI ha ha. :D :D others are EBL, SCB, NIB, all are in sh!t.

Few week ago, I said, share market is butterfly of the economy. In the nature, when butterfly suffers, turn of other organism starts.

I been saying for sometime, those who hate share market are- corrupt, criminal, dalal, loser.

West developed cause of share market. What kind of a person in today's age hate share market and does not understand share market. PAKHE.

What happens when Pakhe becomes ceo, minister, governor......... we are facing the out come.. SBI is going through it. :D

Not just governor, d governors should also be made from outside. Let ceo of banks and national level dev banks be governor, d governors.
Registered: Oct 2013
Posts: 7508
People in Nepal is so dumb, when I teach them 10 things, they just learn one.

In last liquidity crisis (current is not), they kept on blaming excess loan for liquidity crisis. While I kept on teaching them- few reasons behind liquidity crisis. One of them is import.

Today, most are calling import, just some are still saying loan (these must be super dumb).

There is not enough money in bfis- as per NRB, there is still 2.3% liquidity, which is more than 100 billion- are NRB super dumb that they cant even calculate or what the f is going-------------- BUT THERE IS PLENTY OF MONEY IN NEPAL. ABOUT 300-350 which is with the govt. And when dashain remittance start to arrive, it will be a lot higher.

Which means there is no liquidity crisis, but there is crisis caused by human.

So stop calling it liquidity crisis, and start naming persons who created this crisis.

I know, you are dumb. So let me give you clues- NRB, finance minister, bureaucracy at finance minister.

If you check their sur name, you will find most of to be of same X jat.

If you called it liquidity crisis, it will never be solved. If you cant identify the problem, you wont be able to solve it.

All above statement came from 'SECOND TO GOD'.
Registered: Oct 2013
Posts: 7508
NRB has been offering Reverse Repo for months now. They may have already collected more than 100 billion. Govt also collected a lot of tax and borrowed a lot of money. All those should be calculated in liquidity. I believe, there is 200-300 billion in liquidity (BFIs currently have around 70 billion which is good amount).

NRB too auctioning 10 billion worth of development bond or treasury today or tomorrow. If there is liquidity problem, will BFIs buy no bond or offer 5% or 10% interest since MNBBL is offering 9% of FD???

Years back, when interest on loan was 7%, CBL was offering 8-10% on FD. It happens.

Unlike that time, today, some bank like MEGA, PCBL, KSBBL, MNBBL etc were aggressive on lending so their CCD ratio is tight. That does not mean there is liquidity crisis.

Once, BFIs stop competing in reducing lending rate, profit will increase drastically.

I predicted liquidity crisis well before it happened. I also predicted ending of liquidity crisis well before it happened. Now, I predict, there wont be liquidity crisis for at least 3/4 year.
Registered: Oct 2013
Posts: 7508
Bank of Kathmandu reduces deposit interest rates; Standard Chartered Bank discourages long-term fixed deposits

---- I had been asking, why bfis giving so high interest on long term fd when they know, fd rate is going down. After making mistake for 4 year finally SCB is doing the right thing. And rest may follow.

That is why you have to follow right person (I) for right leadership. Idiots thing, following 'I' is in my interest, no Idiots, its in your interest. My interest is just increasing share market, rest is just giving back to the society for greater good. 8)
Registered: Oct 2013
Posts: 7508
गभर्नर डा. चिरञ्जीबी नेपालको कार्यकाल समीक्षा: कठिन परिस्थितिमा पनि ऐतिहासिक काम

should I laugh or kill myself?

I, I the only one who Predicted, made correct analysis in the entire universe going to say this-

"Chirinjivi Nepal, is the biggest curse in the history of monitory policy".

Last for year was suppose to be the best, golden time in the history of Nepal. Before yuraj k, He is the main who destroyed Nepal through monitory policy, blackmailing and corruption.

Corruption- he came into power through corruption and he lest criminals like NICA, Global destroy capital market.

Last for year was suppose to be the best years in the history of Nepal, but Nepal suffered not just liquidity crisis but also interest rate crisis.

Before yuraj k came into power, chirinjivi been destroying Nepal for first two year.

He was too incompetent to solve liquidity crisis. But, interest crisis was all his doing. He forced Bfis to give 13/14% on FD. Only country suffering from economic crisis have such a high rate, but NRB forced BFIs into 13/14% fd rate.

Chirinjivi Nepal single handedly destroyed share market. He made monitory policy just to crash the market. And during his final year, he tried to save share market but could not.

Many criminals tried to crash share marked when it made record. But could not and they used chirinjivi nepal to crash share market through monitory policy and since then share market still could not gain confidence back.

He became governor with the black money of some banker, and later he kept on attacking banks. Kept on destroying banks with every monitory policy he read.

But never punished banks like NICA for their crime which destroyed not just capital market, but also share market.

Sati ko sarap.
Registered: Oct 2013
Posts: 7508
कर्पोरेट ग्राहकको ऋणको ब्याज दर ९ प्रतिशतभन्दा तल आयो, आधार दरमै बैंकहरुले ऋण दिन थाले

'तैपनि माग छैन'

I am the only one who warned about liquidity crisis and interest rate crisis at least one year before it became sever.

I warned about lack of demand of ample loan 1-2 year before it is happening.

Now, I am asking why BFIs are not reducing FD rate significantly- corporate FD rate should be 5%, instead of saving a/c rate.

PS- I gave solutions too.

Was there any CEO in BFI, who asked, how could borrower who had been paying 7% interest going to pay 15% interest.

And when are directors of BFIs firing those CEOs and top officials who had said, liquidity crisis and higher interest rate will last a decade?

When are directors of BFIs firing those CEOs and top officials who took too much FD at higher rate?

bharya haru did not just become CEO of bank, they are paid 3/4 crore per year. this is what happens when only criminals become billionaires (promoters) sati ko sarap.
Registered: Jun 2018
Posts: 91
MFs already put there money in 10% plus debentures which is too much in terms of local and international level. 10% and above return is dream of much investors. So the real issue is, if we can surpass them or not by investing in stockmarket.
Registered: Oct 2013
Posts: 7508
During last 1-2 year I predicted/warned about too much liquidity, and during last 6 month to 1 year I predicted about current liquidity being plentiful. While our bharya type pakhe CEOs were saying, liquidity crisis will persist for another 5/10 year.

But, our bhariya type CEOs- who dont even know what liquidity is? what cash is? what credit is?- been saying loan demand will increase in paush, which had been the trend, they said.

Since, they have decades of experience, I thought it is not wise to make a big noise supporting my claim so I kept my voice low.

Now, BFIs have 50 billion and govt is holding 150 billion. (Decrease FD rate for individual to 6% and FD for institution to 5%.)

Now, I would like to ask

« Last edit by The Rising Sun on Thu Jan 16, 2020 6:55 pm. »
Registered: Oct 2013
Posts: 7508
are murkha ka santan banker ho, why are you taking FD at such a high rate at a time, liquidity is flowing more than demand.

Stop taking FD at more than 6% or dont take at all till FD rate falls far below. At least wait for 6 month. Just take saving deposit.

Instead of reducing interest on FD, they are reducing interest on SA first.

kasta kasta pakhe haru banker banna aucha.

And those mor@ns are taking 10 yr FD.

alchina sati ko sarap. tesak bau le tirna haina interest.
Registered: Oct 2013
Posts: 7508
८० अर्ब लगानी भएको पोल्ट्री व्यवसाय पनि संकटमा, १० दिन कुखुराको चल्ला उत्पादन बन्द

लागत भन्दा कममा कुखुराको मासु र अण्डा बिक्री गर्नुपर्ने अवस्था भएपछि ह्याचरी उद्यमीले चिकेन होलिडेको निर्णय गरेका छन्

अब आउने आइतबारदेखि अर्को आइतबारसम्म सेटर मेसिनमा सेट गरिएका ह्याचिङ अण्डा नष्ट गर्ने

पोल्ट्री व्यवसाय डेढ वर्षदेखि संकटमा छ

धेरै उद्यमी ऋणमा डुबिसकेका छन्

माग भन्दा आपूर्ति बढी भएपछि अहिले किसानले बोइलर जिउँदो किलोको १ सय ५० रुपैयाँ र अण्डा प्रति गोटा ८ रुपैयाँमा बिक्री गरिरहेका छन्

I have been warning about this since last 3 year, since chirinjivi nepal's second monitory policy. I warned them not to divert capital from one sector (including share margin) to another (so called productive sector).

If they do it, it will destroy the first sector and lead to over production on second sector and those stake holder from first sector will loose purchasing power and lead to total chaos and destroy the whole economy.

There has always been one sarbagyani group who kept on talking about BFIs not providing enough loan to agriculture, bfis are too profit oriented, govt should punish them.......... now will those bhate eat all those over produced chicke?

Then after one year, since chirinjivi nepal began to destroy Nepal's economy with is popular, negative monitory policy......... yuraj k entered the scene and made things worst.

I told you so.

I have been watching, analyzing Nepal's economy, and world's little bit, And from last three year, I have been seriously been following Nepal's economy........ I have realized that I am the only one in Nepal who understands economy in Nepal, and I am not even from economic background. Tragic!

And I know, who to prevent such mistakes in future.
« Last edit by The Rising Sun on Sat Dec 14, 2019 3:13 pm. »
Registered: Oct 2013
Posts: 7508
Looks like Gold deposit will be total flop due to bureaucracy with yuraj k mentality.

They are talking about taking gold jewelry, melt it and return it as the jewelry. m0ron bureaucrats, ask your wife if it is possible. intelligent wife! not the dumb ones.

Till there is negative bureaucrat like yuraj k in power, nepal's future is hopeless and we wont see 100000 NEPSE.

It has already been 4 month now and they have not disclosed the draft. I would have drafted the rules with in one day, one month for discussion and another one day to finalize the draft. Total 32 days.

There is better than gold deposit to solve liquidity problem:

Share deposit in fixed deposit in bfis (land deposit):

1: This will solve long term liquidity crisis.

2: We have been talking about giving incentives to long term investors, share deposit promotes long term investment.

3: In the history of NEPSE, long term investors have been fooled and victimized many times, and share deposit will give them incentive. More than 95% investors are long term investors.

4: This will help to educate public that share investment is investment and wealth. Till now, Nepali culture is investing in land and gold. Gold is bad for liquidity and balance of payment.

5: Govt wants to issue infrastructure shares etc. This will help to generate investment.

6: Make economy vibrant.

How to do it?

1: More than 80% of the listed companies are qualified.

2: 90% market value should be considered.

3: Fixed deposit period- 3 month and above.

4: Interest- 3.5% for more than 3 year , .5% for more than 3 month and 1.5% for more than 1 year.

5: Banks should be able to revaluation of value of deposit and depositor should be able to reevaluate in every 6 month. .... .1% charge for revaluation by share holder.

6: If needed to release before maturity, 2% penalty.

7: .5% charge for swapping.

I can start this product with in 32 days.

I know, our bureaucrats and yuraj k and politicians wont do it now, but do it after india starts this.

Yuraj k type will never let Nepal become better than India.
Registered: Oct 2013
Posts: 7508
Liquidity crisis,

One of main reasons that leads to liquidity crisis if Borrower cant make enough profit and unable to pay interest and principle.

What is bank????
Registered: Oct 2013
Posts: 7508
Hope monitory policy would solve liquidity crisis using Gold Deposit.

There could be more than 20 kharab worth of gold jewelry in cities.

If 25% are deposited, it would be 500 billion, about 20% deposit.

Interest rate should be 1-2%.

It should be calculated in CCD ratio.

NRB should give loan against the gold deposit.

BFIs should use that loan to lend to manufacturing industries and hydro @ 5-6% interest.
Registered: Oct 2013
Posts: 7508
आरबिआइले ल्याएको 'टुल' प्रयोग गर्दा यसरी हुनसक्छ नेपाली बैंकको तरलता समस्या समाधान

बैंकहरुले आफ्नो डलर फण्डलाई आरबिआईमा 'पार्क' गर्ने र तीन वर्षपछि आरबिआईसँग त्यो फण्ड फिर्ता लिने उपाय अवलम्बन गर्न लागिएको हो|

Months back, I advised 8 classe Oli and NRB and sarbagyani yuraj k to give loan to BFIs against their foreign currency at 0% interest.

Which would have almost solved currency conversion risk.

But no, they did not listen to me. Now India is about to do very much similar.

If idiots in Nepal had done it when I advised them, they could have said, now India is copying US.

Nepal is kuwa for educated fools and India is the world. I am sure, they will copy indian in this regard too.

sati ko sarap.

Just wait, so called expert in Nepal and sarbagyani in social media will praise Indian move. Which I advised many many months ago.

sati ko sarap.

ke garna. I could have easily turned Nepal into one of the richest. But I am no 8 classe so I am no leader. :roll:
Registered: Oct 2013
Posts: 7508
अर्थमन्त्री पनि बिग मर्जरकै पक्षमा: बैंकको संख्या १०/१२ मा झार्ने गभर्नरको सपना अब पूरा होला ?

* Forced merger:
- Top 8 Bfis whose interest on loan is highest.
- Bfis whose EPS is below 20
- BFis whose capital to deposit ratio is below 10 times.
- Bfis whose CCD ratio is above 78.
- Three govt controlled banks.

एसबिआइ र एभरेष्टलाई केन्द्रीय बैंकले सोध्यो- भारतबाट पैसा ल्याउँछु भनेको के भयो?

Its easy, governor or finance minister should go to China. Ask to buy yuan bond issued by NRB or BFIs amounting to 100 billion NC.

(NRB's bond money should be lended to BFIs with 1% premium.)

Then India will be begging to take their money. So will US and probably Japan too.

You can ask Qatar too.
Registered: Oct 2013
Posts: 7508
स्प्रेडको नयाँ गणनाविधिले बैंकको आम्दानी ३२% ले घट्ने, समीक्षा गर्न बैंकर्स संघले बैठक बोलायो

What should BFIs move?

- First of all, directors of BFIs should fire those pakhe CEOs who went around saying Interest rate wont fall for 4/5 year, those CEOs who recommended to increase interest. There are 4/5 of those CEOs.

- Until interest rate crisis is over, directors should reduce salary of CEOs to 1 lakh per month and no other benefits.

Banks profits have been attacked every time CEOs charge high interest. Its common sense, when you do too much, there will always be kranti.

BFIs in Nepal make least profit among banks in the entire world. In the world, Banks make 200/300 EPS while in Nepal they make 27 EPS.

Even new company like shivam cement which has no any good will in the market makes 30 eps. And banks, which is the back bone of any economy makes 27 EPS. That's not healthy.

Now, the most, if govt or NRB does not reverse their decision on attack on income of BFIs which has always been the lowest in the world, add another demand- reduction of tax, teach them lesson what BFI means.

Teach those pakhe politician and bureaucrats, there is a reason, Banks are called main back bone of modern economy.

How to do that, tell borrowers not to pay interest, then cross NPL over 25 and crash the whole system. I am sure, CIA, RAW will fully support you.

All pakhes in media as well as social media as well as pakhe so called economic expert should know the importance and power of Bank in a society.

Teach commie/socialist a life/economic/political lesson.
Registered: Oct 2013
Posts: 7508
Intelligent, professional, experienced strategist, policy maker would target base rate, but in Nepal pakhe strategist, policy maker has always been targeting spread rate.

this is sati ko sarap

- Bfis in Nepal make least profit in the world (probably 10/20% of world average)and still, their profit has been targeted frequently and khate in media, social media drop ral and attack their profit.

- BFIs in Nepal follows rule of Nepal the max among all industry and still they have been targeted frequently.

- Bfis in Nepal pays highest tax in terms of no as well as percentage and still they are being targeted frequently.

Idiot industrialist, you too invest in industry for profit. dont you crook know basics that you should not attack other's profit making. why dont govt fix spread rate of industries too to 4.5%? but dont, if you attack profit of business, Nepal happens. No body will invest here. only criminals invest in nepal who wont follow law and contribute nothing to the country.

By the way, what is their spread rate- 100%, 200%, 500%?????

What is the spread rate of passport- 5000%, 100000%??? govt of Nepal is the biggest criminal in Nepal.

What is the spread rate of NOC? 15%, 25%???????

Why is Unilever's product so expensive? what is the spread rate- 1000%,10000%????

whose fault is the reason behind attack on profit of BFIs for years????
-first fault is pakhe policy maker like yuraj k and nepal of nrb

-second, criminal pakhe big promoters of BFIs who hired incompetent CEO.

-third, pakhe CEO, who dont know basics- if you do too much, there will be kranti and in banking sector, during kranti its always profit of bfis that is hit.

I believe in free market, but there is always limitations. My views is, CEOs salary should be determined by the company, not govt.

But who gives a dam when one is suffering. Why should CEOs make crores while every body is suffering. Its time NRB should fix salary of CEO of banks to 10 lakh/year and no benefit.

Who gives a damn about free market? right.

Because of sati ko sarap, all sector in Nepal is ran by pakhe.
Registered: Oct 2013
Posts: 7508
Bfis profit in Nepal could be the lowest in the whole world.

And still, they keep on complaining about their profit being high cause those retards hear billion when they hear profit amount. Those savages dont understand what EPS is.

I believe those pakhes have not heard about profit of NTC, Ncell, Unilever.

And there is another group of pakhes running BFIs, their CEOs and directors think, weather they charge 7% interest or 15% interest, income of BFIs wont be affected since, they could only charge 4.5%.

But those morons dont understand is, when they charge 15%, NPL will increase and which could lead to collapse of Banking sector and the whole economy.

And there is another threat when they charge 15%, there will be revolt from borrower.

And every time there is revolt from borrower, either NRB or govt attack profit of BFIs instead of trying to decrease interest rate.

In the past, NRB introduced spread rate of 5%. And still interest rate did not fall, so not they have reduced the spread rate to 4.5%.

Now again, idiot sarbagyani yuraj k is talking about eradicating service charges.

Why doesnot sarbagyani just dissolve BFIs and tell institutional depositors to give loan directly. And individuals should do the same.

Commie thinks, you should not expect profit from business. If you want to make profit, you should join politics or bureaucracy or become CIAA officials. :roll:

All the attacks on profit of BFIs----- which makes too little profit and the least profit in the entire world- is due to pakhe CEOs. Same idiot CEOs who goes around telling interest rate wont fall for 4/5 year, dont expect interest rate to fall for another 5/6 month.

Now will share holders of BFIs fire those pakha CEO??????????? Their incompetency in determining right interest rate is the reason, BFIs have been attacked from all sector. And most of the time it's profit is being attacked. Let me repeat, BFIs in Nepal make the least profit in the entire world.

For pakhas running system, there is another advise from real sarba gyani ''''I''''' to bring down interest:
- Let fixed deposit contract to be cancel by paying 1% penalty.

Company like NTC, insurance companies are suppose to make profit by selling service, not from FD interest.

Reduce their FD interest to 2%. May be then, they will start to reinvest their profit in real business, shares (share is where, in civilized world, insurance/pension fund/NTC like invest) instead of depositing in FD. Remember, only those can invest in business aka take risk which are making good profit. And NTC, Ncell, insurance are making profit. If they dont re invest their profit in business or shares when who will? will those who make 50k per month take risk in new business?????? No.......... but pakhas policy maker dont understand this psychology of business/investment.

So let think tank make policy.

Pakhas, dont attack profit of BFIs. Their profit is very low and lowest in the world. Send those BFIs who are charging high interest into forced merger, make CEOs of those companies disqualified to run BFIs for life.

NRB should fix interest rates. Policy should be increasing profit of BFIs to build Nepal and make them healthy. Not destroying them.

NRB should fix max interest:

Saving a/c: 5% max
FD for institution: 5.5% max
FD for public: 6.5%
FD for elderly (male above 55 and female above 50):7%

Interest on loan:
For bank: 10% max
For dev: 11% max
For finance: 12% max

Min interest rate on deposit: 2.5%
Registered: Oct 2013
Posts: 7508
India's top business groups on Thursday urged the central bank to cut its benchmark interest rate by at least half a percentage point and lower the cash reserve ratio it imposes on banks to stimulate an economy that is showing signs of weakness.

India has more than 7% economic growth and they are worried about slow down.

In Nepal every thing is Ok. :mrgreen:
Registered: Jun 2018
Posts: 91
THE RISING SUN jee ko perfect kura....most of the countries will be willing to invest/deposit money in our country in terms of interest rate or growing economy. But we are neighbour to india and only marwadi mofo are allowed. Soon voices will rise to respect nazis and kill jewes.
Registered: Oct 2013
Posts: 7508
Why dont Oli ask China to deposit 150 billion in Nepali bank?????? Qatar did same in Pakistan or Turkey.

After we approach China , India and US will come forward to deposit too.

Nepal can ask Japan and Korea too. And Qatar too.
Registered: Mar 2018
Posts: 2292
अर्थतन्त्रको मागलाई पूरा गर्न भद्र सहमति गर्नुपर्यो, एकल अंकमा झार्नुपर्छ
Yes man that's true but it should happen naturally not by CURTAILING, otherwise many of us will divert our fund
that is what you ve to see. Many people close to me ve now taken investment in NEIGHBOUR COUNTRY CAPITAL MARKET which is more tech friendly and lucrative. If this scenario continues many of us are also induced to do so.
Registered: Oct 2013
Posts: 7508
Elaborated cause and prolonged liquidity crisis:

1: Unspent cash in Govt coffin
2: CCD ratio
3: Forced loan for so called productive sector.

I want to elaborate the 3rd one, since I have been talking about 1 and 2 for a long time now.

When liquidity crisis started, when every body including NRB, so called expert, politician, wanna be expert in social media all blamed BFIs for liquidity crisis, I blamed unspent cash in govt coffin. And some time later I added CCD ratio.

They were blaming bfis giving 5/10 billion more loan than they should, l went against the whole country and said its cause cash outside the system- govt coffin and CCD ratio.

Last year or so, many have began to blame 1 and lately some are adding 2 too. So my job is done here regarding 1 and 2.

Now during last few days, I have added third most reason.

Let me elaborate it.

Let me explain the easier one first.

If bfis had given share loan first then other priority sector then, this happens:
- give 100 share loan. Then immediately would have returned 100 back to bfis.
- Then give 80 to hydro then 60 would have returned and 20 would have left Nepal.
- Then give 48 to hydro, then 36 would have returned and 12 would have left nepal.
- then give 28 to hotel/cement again, then 14 would have returned and 14 would have left nepal.
- Then give 11 to agri loan. And 9 would have returned and 2 would have left nepal.
- then give 7 to industry. and 2 would have returned back to bfis and 5 would have left nepal.
- then give that 1 to retail loan.

Here, total liquidity created would have been: 100+ 80+48+28+11+7+1=275
In this scenario, Share would have govt 100, remember, share market capitalization is half of GDP and both SMC and GDP are undervalued and very small.
Hydro would have govt- 128
Hotel/cement- 28
Agri- 11
Industry- 7
Retail- 1
Here all gets healthy required capital.

But due to so called priority sector, this happens:
- give Hydro 100, 75 would have returned, 25 would have left nepal.
- give hydro 60, 45 would have returned, 15 would have left
- give hotel/cement/industry 36, 16 would have returned and 20 would have left
- Give 12 to agri, 9 would return and 3 left
- give 7 retail, 2 would return and 5 left
- give 1 to share

Here total liquidity had been created= 100+60+36+12+7+1= 216
Here, Hydro would get 160, hotel/cement/industry would get 36, agri 12, retail 7 and share 1.
Here, hydro gets too much capital, and share very low. And share price falls. And local instead of investing in hydro, they buy alcohol. Public dont want to invest in share and instead spends on luxury.

So difference would be, 275-216= 59 , 20%. Bfis loose 20% business so they push loan with money they cant loan.

But that's not the worst.

Here is the hard part: hard to understand if you are not a really good economist.

Remember, current dactor governor, he is not good in banking or economics or money. There is a saying in Nepal "duplicate sadu use more ashes".

Since, he does not understand fiscal policy, and since no one in NRB understands fiscal policy, When during his first fiscal policy, he increased requirement for priority sector loan in BFIs' loan. And if I remember, from Next year, liquidity crisis started. And Next year, due to liquidity crisis, he tightened share loan, personal loan and increased requirement for priority sector loan again. He kept on increasing every year and liquidity crisis only got worst.

I explained above how so called priority sector loan is the third biggest reason our liquidity crisis got worsen.

Wanna be economic expert in social media all talks about giving priority to so called productive sector while giving loan. When going gets tough, tough gets going.

Now let me talk about the real danger created by micro management of Money by NRB, sarba gani yuraj k's fixing of high priority sector loan. They have forced BFIs to give a big big portion of loan to so called productive sector.

In economics, pushing hard something always leads to crisis. I have been advising not to force banks to give too much loan to priority sector if there is no healthy demand. So reduce percentage of such loan.
Or at least, instead of telling BFIs to give 40% loan to priority sector, tell bfis to separate 40% loan to priority sector. If there is good demand then banks can give, if not hold that cash. Which would help in maintaining CCD ratio too.
I dont even remember is that priority sector loan is 40 or 30, they keep in increasing every year.

Here is an example, the devil created by so called force full priority sector loan. """""""""""""HYDRO-POWER"""""""". We all know, lately a lot of latest hydro in development are in bad condition. Its cause bfis are forced to give hydro loan to who ever demands hydro loan. Cause of the priority sector loan.

This is what happens when you make force in economics. In US too, when BFIs pushed for housing loan, There was housing crash in 2008. And bill clinton pushed for that loan.

In Nepal, NRB, sarba gyani yuraj k is pushing priority sector loan, and I can see potential crash in hydro sector, probably cement industry too.

So reduce percentage of priority sector loan and change policy to, BFIs should hold certain percentage of cash to priority sector loan. They dont have to give it if they dont find right candidate.

Top three reasons behind liquidity crisis:

1: Unspent cash in Govt coffin
2: CCD ratio
3: Forced loan for so called productive sector.
Registered: Oct 2013
Posts: 7508
तोकिएको पूँजी नपुर्याउने, पाँच बर्षदेखि घाटामा रहेको, राष्ट्र बैंकको निर्देशन उल्लङघन गर्ने र जोखिम ब्यहोर्ने कोष कायम गर्न नसक्ने संस्थालाई फोर्सफुल मर्जरमा लगिने भएको छ|

Instead of '5 year in loss', NRB should forcefully merge or acquire those BFIs whose EPS is below 20.

Actually those BFIs whose EPS is below 75 cant contribute significantly to society or economy.

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