It again reiterates that their amalgamation with larger banks is the solution.

Economists point out that this will also help the banking sector to enter the international capital market.

At present, the country has 25 licensed commercial banks, but five of them hold 80 per cent of total assets in the sector.

The Central Bank has ordered banks to implement Basel III regulations in order to strengthen their capital cover and liquidity cover.

The NDB Securities further says in its report that the country’s economic growth will be 6.4 pc, 7.0pc and 7.2pc in 2015, 2016 and 2017 respectively.

It also projects the banking sector’s growth to be 16.8pc, 18.4pc and 18.9 pc during the same years, Randora reports.