Private sector urges govt to develop mechanism to facilitate remittance inflows through banking channels

Published On: January 20, 2022 07:30 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 20: Private sector has requested the government to provide subsidies to raise interest rates on the remittance earnings to facilitate migrant workers to send money they earned through banking channels.

In a meeting with the Finance Minister Janardan Sharma on Thursday, three umbrella organizations—Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI) and Nepal Chamber of Commerce—have asked the government to facilitate inflow of remittance via banking channels to fight with the current economic problem. According to them, the country is receiving only half of the actual remittance amount due to lack of government mechanism to facilitate bank based money transfers.

Currently, the government is struggling to maintain the foreign currency reserves mainly due to the fall in the country’s remittance earnings. It has also adversely affected the liquidity position with the banks. Mostly, an increasing use of the informal channel popularly known as ‘hundi’ has been blamed for the recent decline in remittance inflows.

FNCCI President Shekhar Golchha said the government should provide an additional interest rate in grants to those migrant workers who send their money through banking channels. According to him, many banks have already started providing an additional one percent interest rate as compared to the normal type of deposit to the remittance transaction made through formal channels.

CNI President Vishnu Agrawal said the government needs to allow businesses outlets to run by implementing safety protocols even amid the ongoing spread of coronavirus. “Despite the high spread rate, the risk due to the pandemic is relatively low at present. So, the government has to develop a mechanism to run the economic activities smoothly,” Agrawal said.  

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