Most of the sectors were affected by the lockdowns and prohibitory orders. However, the banking sector was not affected much.

Over the last one and a half years, many bank employees were infected with coronavirus, some got seriously ill and some lost their lives. Even in such a difficult situation, we managed to provide banking services.

Net interest income is the main source of earning for banks. After the start of the Covid-19 pandemic, income from interest along with other commissions, service charges have not been satisfactory. Only a little in interest and principal amount of the money loaned to businesses of the pandemic-affected sectors has been repaid.

In spite of the bad economic situation, the business of banks grew noticeably. The increase in profit last year was due to the earnings from the sale of stocks of microfinance and other companies the banks had invested in long ago. But the operating profit of banks has declined.

The banking sector is the mainstay of the country's economic revival. Banks have helped keep the economy afloat after the pandemic began. We know our responsibilities well and will work with the stakeholders for the economic recovery.

Banks in other countries were afraid to lend money during the worst times of the Covid-19 crisis. But banks in Nepal set a new record in lending even during this time of severe slowdown and uncertainty.

After the pandemic started, bankers discussed the ways to help keep the economy afloat. As banks had sufficient investment-grade liquidity, we decided to mobilise loans significantly. As a result, the credit flow has doubled in the last fiscal year. Commercial banks usually disburse Rs 400 billion in new loans annually. However, the amount reached Rs 800 billion in the last fiscal year. Similarly, banks have also lent money in concessional loans enthusiastically to support the struggling businesses. The number of borrowers of concessional loans was 32,448 by the end of the fiscal year 2019/20 which reached more than 100,000 with such loans totaling Rs 161 billion. There is a high credit flow to sectors such as SME, energy and agriculture.

The country's exports increased by 44.4 percent in the last fiscal year. Imports also increased by 8.7 percent. Similarly, the government collected Rs 938.32 billion in revenue.

Previously, there was no such growth in import, export and credit. It is encouraging to see this level of growth even during the sharp economic slowdown, and behind all this are the loans disbursed by the banks. The focus of Nepal Rastra Bank has been to support struggling businesses, and banks have played an instrumental role in this respect. Now the banking sector is ready to play whatever role is necessary for the country's economic revival.

The monetary policy for the current fiscal year has also addressed many issues related to economic recovery. We will now help implement the arrangements as directed by the central bank. The interest rate has also been maintained at single digit which is helping to increase demand in the market.

Access to finance in the country is increasing. Based on the deposit accounts, we have estimated that more than 75 percent of Nepalis had access to finance by the end of the last fiscal year. However, the exact figure is yet to come out. In the previous fiscal year, 67 percent of citizens had access to finance. Last year, 3.84 million new deposit accounts were opened in commercial banks. Even if there is duplication, two million new bank accounts have been opened.

Similarly, banks have expanded their operation in almost all parts of the country; out of the 753 local levels, commercial banks have branches in 750 levels. Most of the account holders do banking transactions on a regular basis. Bank accounts have also been opened for social security allowances. The number of loan accounts is also increasing. Overall, Nepal's financial access is the best in South Asia. This will also spur on the revival of the economy.

(Dahal is President of Nepal Bankers’ Association and CEO of Sanima Bank Limited. This article is based on conversation with him.)