NCC, CNI, NFTA welcome monetary policy

Kathmandu, July 19

Nepal Chamber of Commerce (NCC) and Confederation of Nepalese Industries (CNI) on Sunday welcomed the Monetary Policy of the Fiscal Year 2020/21 believing that it would  rehabilitate the economy battered by the COVID-19 pandemic and give much needed impetus to the businesses.

"The central bank has incorporated more than 75 per cent of the suggestions submitted by the NCC. We believe that the policy would provide relief to private sector entrepreneurs in the aftermath of the crisis," NCC said in a statement.

It has specially appreciated the provisions like providing refinancing to the businesses affected by the pandemic, 20 per cent additional lending on the working capital maintained in March 2020, and extension of loan repayment period for the businesses severely and moderately affected businesses.

The Nepal Rastra Bank in its monetary policy has announced that the business severely affected by the pandemic will have their loan repayment schedule extended to the end of the current fiscal year while the moderately affected entrepreneurs will have nine-month extension for the same.

"The provision for the banks and financial institutions (BFIs) to mandatorily mobilise minimum 15 per cent of lending to the agriculture and 10 per cent to the energy sector within the next four years, plan to develop the Agriculture Development Bank as a lead bank of the sector and issue Farmer Credit Card will certainly help in the economic development of the country," said the NCC.

The CNI appreciated the accorded priority to the agriculture and energy including the provision of agriculture bond and energy bond.

"Such provision will make the sectors more attractive for investment," it said.

It also appreciated the priority given to the tourism sector which is the highly affected economic area, increment in the credit to core capital to deposit (CCD) ratio, and fixation of the service charges for the banks of different classes.

However, they said that the demand to lower the spread rate was not incorporated in the policy.

Meanwhile, Nepal Foreign Trade Association also welcomed the monetary policy. "It has provisions that will help in the business and economic revival, increase liquidity in the banking system, and lower the cost of business," it said.

But its demand to waive off charges on electronic transfer was not addressed.

Published in The Rising Nepal daily on 20 July 2020.