“Since the commercial banks do
not have organizational set up to float such loans, they are confused by the
new provisions. It will be very hard to meet,” NBA president Upendra Poudyal remarked
in a press conference.
The monetary policy of the current
fiscal year has maintained the previous provision of 5 per cent deprived sector
lending requirement for the commercial banks which was being channeled through
microfinance institutions till now.
The central bank continued the
provision that requires the commercial banks to mandatorily lend 20 per cent to
the productive sector but raised the ceiling of the productive sector lending
on agriculture and energy sectors to 15 per cent from 12 per cent.
“Floating 15 per cent of the
productive sector lending to agriculture and energy is highly challenging. The
banks have not been able even to meet the previous provision of 12 per cent,”
said Poudyal.
According to him, Nepalese
agriculture was yet to be commercialized as it lacked proper value chain. “Bank
lending will be automatically channeled to the agriculture if the value chain
is developed effectively. If there is a proper value chain, it creates demand
of investment itself.”
Saying that the banks were not
against productive lending but support initiatives to increasing such lending,
Poudyal urged the NRB to include the industrial sectors like cement and tourism
in the definition of productive sector.
He expressed his hope that the
central bank would review the provision in order to address the concerns of the
commercial banks.
The NBA appreciated the monetary
policy for its special emphasis on institutional good governance, risk
management, reducing cash transaction, financial inclusion.
However, it informed that its
demand to implement provision for external commercial borrowing couldn’t be
addressed by the NRB in the policy.
Former NBA president Sashin
Joshi appreciated the provision of interest rate corridor.
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