Allow Nepali to invest abroad: FNCCI

KATHMANDU, July 1: Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has urged the government to introduce a provision that will allow Nepali businessmen to invest abroad.



The country´s apex private sector body has called on the government to incorporate this provision in the monetary policy that the central bank is scheduled to bring in soon for the next fiscal year. The appeal comes at a time when the country´s money is flowing abroad through illegal channels due to shrinking businsess opportunities at home. [break]



FNCCI has also suggested the government make optimal use of the remittance money coming into the country, through the issue of Development Bonds and Civil Savings Bonds.



Currently, the major portion of remittances sent by migrant workers is being used for consumption or is invested in unproductive sectors such as real estate.



"The government could instead tap this money - which amounts to more than Rs 170 billion per year - by issuing bonds and channel it into the economic development of the country," senior members of the FNCCI told Deependra Bahadur Kshetry, governor of Nepal Rastra Bank, on Wednesday.



During the meeting, FNCCI members also requested the government to take initiative to secure loans from foreign banks at subsidized interest rates. "This capital can be used in infrastructure development, which usually needs huge investments that domestic banks cannot make," the FNCCI members said. "Initiatives should also be taken to establish an infrastructure development bank."



FNCCI has asked the government to lower the cash reserve ratio (CRR) to 4.5 percent from the existing 5.5 percent. CRR is the percentage of its total deposits that a bank has to deposit with the central bank.The lower the CRR, the more the liquidity that banks will be able to handle, helping them deal with problems like liquidity crunch.



FNCCI has likewise requested the government to legalize the hedging of gold, copper, palm oil and zinc and allow use of convertible currency while importing goods from India´s Special Economic Zones and Export Processing Zones. The apex private sector body has demanded that they be allowed to make use of convertible currency while importing goods on which India slaps higher excise duties than the customs duty levied by Nepal.

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