Kathmandu, June 10 – Manoj Gyawali, Chief Executive Officer (CEO) of Nabil Bank, has said that despite a decline in interest rates, consumer demand and spending have yet to recover, underscoring the need for the government to restore confidence in the private sector.

Speaking during the first session of the Fourth National Banking Discourse 2026 titled “How Long Will Money Continue to Pile Up in Banks? How Can Business Confidence Be Revived?”, Gyawali said market activity has remained sluggish even after borrowing costs eased.

“Our society tends to panic and become overly optimistic quickly. Earlier, it was argued that high interest rates were preventing economic activity. But even after rates have fallen, there has been no significant improvement. Consumption remains weak,” he said.

Gyawali noted that Nepal’s banking sector has performed relatively well compared to other countries in South Asia, describing banks as innovative, disciplined, and well-governed institutions. He added that if other sectors had regulators as effective as Nepal Rastra Bank, improvements would have been more widespread.

He pointed out that remittance inflows have reached Rs 257 billion, but much of the country’s consumer base is abroad due to migration.

“Banks are ready to provide loans and offer whatever products and services customers need,” Gyawali said. “The problem lies in consumption, which has been affected by migration.”

Expressing concern over recent actions against business leaders, he said, “Bank CEOs and entrepreneurs are being arrested. If they are truly guilty, why would the courts release them? Why are financial offenses not being distinguished from criminal offenses? If someone commits a financial crime, imposing hefty penalties would be sufficient.”

Gyawali urged the state to adopt a more sensitive approach, saying that the overall economic situation is not beyond repair.

“Nothing has collapsed. The government must work to strengthen the morale of the private sector,” he said. “Nepalis who have gone abroad are willing to return, but the state must create an environment that encourages them to come back.”

He emphasized that rebuilding confidence among businesses and investors is crucial for reviving consumption and stimulating economic activity.