Biratnagar’s businessmen, industrialists welcome monetary policy

Kathmandu, July 30

Industrialists and businesspeople of Biratnagar have expressed belief that the Monetary Policy of the current Fiscal Year 2023/24 would make the national economy more vibrant.

Speaking at an interaction organisated by the Chamber of Industries Morang (CIM) on Tuesday, entrepreneurs, bankers and chartered accountants said that the policy would promote the growth in the construction business and share market.

"Although there is enough liquidity in the banks at present, considering the laxity seen in the credit flow, the variance analysis mentioned in the working capital credit guidance, the provision of credit adjustment is extended from mid-July 2025. This is a welcome step," said Rakesh Surana, President of CIM.

According to him, revising the loan limit of Rs. 10 million for the micro, small and medium enterprises, the arrangement made in the case of construction professionals, and removing the Rs. 200 million limits on margin lending for the institutional investors will propel the market growth.

The businesspeople and bankers also said that the policy to establish an asset management company to manage non-performing and non-banking assets of banks and financial institutions, maintain the upper limit of the interest rate corridor at 6.5 per cent from the existing 7 per cent and the policy rate at 5 per cent from 5.5 per cent, and announcement to protect the interest of the microfinance customers are positive initiatives.

Surana expressed his concerns over the monetary policy's silence on the issue of dealing with the problems of the large manufacturing industries, as well as regulating the transactions on credit.

He also expressed worries about the proposed revision of the existing credit information and blacklisting directives to amend the provision that maintains cheque dishonour as a crime and blacklist the issuer of such cheques. "The Nepal Rastra Bank (NRB) should be careful in this regard," he said.

Santosh Budhathoki, President of Nepal Bankers Association, Koshi Province and Provincial Chief of NMB Bank Limited, said that the new monetary policy would propel growth and development in the construction sector and stock market. He said that he is hopeful that a circular would come from the central bank to increase the demand for loans when many sectors of the economy have been affected by the recession.

Dinesh Kumar Pokharel of Saptakoshi Development Bank Ltd. expressed his belief that the monetary policy would be focused on maintaining economic sustainability and increasing market demand by pre-evaluating the pressure that may come on the private sector in a situation where the demand for goods in the market was expected to decrease as the consumer class was leaving the country.

Chartered Accountant Tirth Yadav said that although brain drain is the main problem for the country, the monetary policy has failed to address the issue of job creation and provide immediate relief to large industries that play an important role in creating new jobs.

Published in The Rising Nepal daily on 31 July 2024.