KATHMANDU, August 14: The country’s private sector has welcomed the monetary policy 2021/22, stating that the macroeconomic policy could provide respite to the COVID-19 affected industries including small and medium enterprises (SMEs) and tourism businesses, along with speeding up the economic recovery.
Issuing a press release, the Federation of Nepalese Chambers of Commerce and Industries (FNCCI) has said that the continuation of refinance, restructuring and rescheduling facilities will help yield positive results mainly for the coronavirus-affected industries. “The provision of charging a maximum premium of two point percent in the base interest rate in the credit of up to Rs 10 million to be taken by the SMEs will help increase access of these businesses to bank loans,” reads a press statement issued by the FNCCI.
In addition, the scrapping of the credit to core-capital plus deposit (CCD) ratio could also help maintain adequate liquidity in the market, FNCCI said. Nepal Rastra Bank (NRB) through the monetary policy, has asked the banks and financial institutions (BFIs) to maintain the loan to deposit ratio at up to 90 percent by annulling the mandatory CCD ratio. Under the rule, the BFIs were needed to maintain the CCD ratio at 85 percent, which means that banking institutions cannot extend more than 85 percent of the deposit and core capital as loans.
Private sector says monetary policy positive, stresses implemen...
Similarly, the Confederation of Nepalese Industries (CNI) has said that the flexibility in loans for the pandemic-affected industries will help them continue and expand their businesses while increasing the economic activities. “The announcement to waive the penalty amount in the interest dues of the tourism businesses will support the recovery of the related businesses,” reads a press statement of the CNI.
The revision in the criteria for micro scrutiny of the firms reeling in the net loss and promotion of startups and digital banking are among the measures that the CNI has stated as the praiseworthy steps taken by the central bank. The CNI, however, has expressed its dissatisfaction over the monetary policy ‘for failing to address the grievances of the larger industries’. The umbrella organization of the private sector has expressed its doubt on the NRB’s target to maintain an inflation rate within 6.5 percent in the current fiscal year.
Nepal Automobile Dealers’ Association (NADA) has welcomed the NRB’s move to provide refinance for the installation of charging stations for electric vehicles. Similarly, the association has marked as positive the extension of repayment period of principal amount and interest dues as of mid December by another year.
The Hotel Association Nepal (HAN) has said the monetary policy will provide much relief to the largely affected tourism businesses provided the implementation of the announced program will be equally monitored.
