POKHARA, July 3: Tourism entrepreneurs have urged the Nepal Rastra Bank (NRB) to bring a special relief package to save the tourism business which has been affected by the coronavirus infection.
The Hotel Association Pokhara organized a discussion with industrialists in Pokhara on Saturday to provide suggestions to the NRB regarding the new monetary policy to be made public in a few days. On the occasion, Chairman of the Association Laxman Subedi submitted written suggestions and demands to NRB Governor Maha Prasad Adhikari.
Stating that the budget presented on May 29 had failed to address the problems of the tourism sector, Chairman Subedi said that the monetary policy should address the problems of entrepreneurs. He also said that 30 percent of businessmen and a large number of employees have fled due to Covid-19. "Entrepreneurs have been displaced, a large number of jobs have been lost," said Subedi.
Revised interest rate corridor system introduced
He also said that some small entrepreneurs have survived due to the lifesaving fund introduced by the Gandaki Province government. Subedi said that the NRB should come up with a policy to save the entrepreneurs as some of them survived last year when they got concessional loans. Stating that the financial condition of the hotel and tourism industry has not been comfortable so far, the association has requested the NRB to make arrangements to keep a separate account of the interest due by mid-July 2081 BS and not impose any penalty.
Similarly, the association has also suggested making the loan processing fee concession by providing additional loans required for hotels at low interest rate. "Even though the coronavirus infection has subsided, the tourism sector has not had a chance to flourish. Businesses are still weak,” said Subedi, “So it would be easier for financial institutions to provide loans.”
The association also demanded that the hotel industry be given a 'cash back incentive', just like the companies that bring in foreign exchange through exports. The association has also suggested to the NRB to increase the limit of concessional loan from Rs 200 million to Rs 500 million and to form a committee involving the private sector to monitor whether all hotels get such loans.
"The existing loans should be rescheduled for at least three more years and arrangements should be made to pay and repay the capitalized interest in proportionately long-term installments,” the demand letter submitted by the association says. Similarly, the association has demanded that the service fee charged by the banks for credit card use should be reduced to one percent from three percent and Indian notes of Rs 500 and Rs 2,000 should be accepted in Nepal and any currency of SAARC countries should be accepted by banks here. "Right now, Indian tourists have to carry money in their bags," he said. "It needs to be improved."
The association has also suggested that the 100 percent margin on the letter of credit imposed by the state on imports should be reduced to 10 percent. Stating that the tourism business is going through a difficult situation, the association has also demanded the NRB to make arrangements for the banks and financial institutions not to charge any kind of fine, repay the loan and auction the collateral of the entrepreneurs.
In the discussion with the entrepreneurs, Governor Adhikari said that Nepal's economy has gone through a challenging situation and the huge gap between imports and exports has hampered the economy.
As tourism investment is a long-term investment, the entrepreneurs raised issues such as the need for the banks to treat loans and interest collection accordingly, banks should not torture businessmen for repayment of loans and interest, bankers and businessmen should be distinguished, refinancing period should be extended, customs duty on manufacturing and luxury items should be different, bank interest rate should be single digit.
