Kathmandu, Aug. 13
Finance Minister Dr. Prakash Sharan Mahat has sought support
from the Nepal Rastra Bank, private sector organisations and banks and financial
institutions (BFIs) to stimulate the economy that is coming out from a brief
recession but has largely been stagnant.
On Sunday, he held multiple meetings with the Governor of
the Nepal Rastra Bank, Maha Prasad Adhikari, leaders of the private sector
organisations, and chief executive officers of the banks.
In an effort find solutions to current economic challenges
and return the market activities to pre-recession normalcy as well as to ensure
resource mobilisation in terms of revenue and expenditures, the FM has been
making multiple efforts and consultations with concerned stakeholders including
the regulatory bodies, private sector, domestic and foreign investors and
development partners.
His secretariat wrote in a statement on Sunday that the sole
purpose of his engagements is to revitalize the economy by identifying the
challenges and find ways to address them.
In a meeting with the Governor of the Nepal Rastra Bank,
Maha Prasad Adhikari and leaders of the private sector organisations, he discussed
the possible way out from the current state of stagnation in the economy. FM
Dr. Mahat sought ways to bring the bank interest rates down, instill confidence
in the investors and business community, and make the consumer market vibrant.
Presidents of Federation of NepaleseChambers of Commerce and
Industry, Chandra Prasad Dhakal, Confederation of Nepalese Industries, Rajesh
Kumar Agrawal, and Nepal Chamber of Commerce, Rajendra Malla, requested the
minster to find solutions to high interest rate and other challenges faced by
the business community.
Earlier, FM Dr. Mahat met with the chief executive officers
of the banks at his office to seek their support in making the economy vibrant.
"Banks and government are not adversaries, let’s support each other. Our worries are the growing liquidity, remittance and tourism activities but economic activities and investment have not been encouraging," he said.
He assured the CEOs that the government has zero tolerance
policy to the campaigns being run to incite people not to pay the interest and principal
of the bank loan. There won't be any waiver for loan and interests, Dr. Mahat
stated.
According to him, about Rs. 70 billion has been paid to the
contractors, and only about Rs. 8 billion is to be cleared. "So, now you
have the duty to support the economy and encourage business activities while
maintaining your competitive spirit by lowering the interest rates as far as
possible," he said.
The government is seeking support from the banks in creating
dynamism in businesses and economy. Spending confidence is still low. So he
said, "We all need to address it united. Borrowing should be increased in
the days to come. Let's find out how each of us can contribute to the
economy."
Bank interest rates on deposits have come down slightly to
9.5 per cent – although some offered up to 10.9 per cent – for mid-July to
mid-August period after about two years. But while the banks have a significant
amount of deposits, there is no demand which has kept the economy stagnant. FM
Dr. Mahat has called a meeting at a time when the banks are preparing to
announce new interest rates on lending and deposits for the month of Bhadra in
Nepali calendar which begins on 18 August.
Published in The Rising Nepal daily on 14 August 2023.
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