Kathmandu, June 10 – Guru Prasad Paudel, Executive Director of Nepal Rastra Bank (NRB), has stressed the need for a confidence-stimulus package to revive investor sentiment, saying that macroeconomic indicators remain largely sound but confidence among investors has yet to recover.

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?”, Paudel said that the private sector appears to be seeking a stimulus package following the announcement of the national budget.

“Most indicators are reasonably healthy, but investor confidence has not improved sufficiently,” he said. “Perhaps the private sector is looking for a stimulus package after the budget. Small borrowers are facing difficulties, and there is concern over whether banks and financial institutions have become reluctant to extend small loans.”

Paudel noted that the central bank has introduced provisions allowing loans of up to Rs 1 million to be issued without mandatory collateral requirements.

“We have also facilitated digital financial services. There are sufficient measures available through monetary policy to support the economy,” he said.

Highlighting the current liquidity situation, Paudel said banks are in a position to expand lending but emphasized that restoring confidence is equally important.

“There is ample liquidity in the banking system, and banks are capable of providing loans,” he said. “However, efforts must focus on rebuilding confidence. Consumption and demand remain weak. It is not enough to simply tell banks to lend more.”

He argued that increasing investment in infrastructure and stimulating demand should be the primary focus of policymakers.

“Liquidity in the banking sector has risen significantly. To make effective use of it, attention should be directed toward boosting demand and creating an environment that encourages investment and consumption,” Paudel added.