Deprived sector lending reaches Rs. 100 bn

Kathmandu, June 25:

Executive director of the Nepal Rastra Bank (NRB) Nara Bahadur Thapa Sunday said that the deprived sector lending has reached about Rs. 100 billion.

“The policy intervention by the central bank has created such a positive development that the deprived sector lending has increased tremendously and simultaneously contributed to the development of micro and cottage industries in the rural areas, as well as supported in women empowerment,” he said.

He was speaking at a discussion programme on upcoming monetary policy for the next fiscal year 2017/18. The programme was organised by the Confederation of Nepalese Industries (CNI).

The commercial banks, development banks and finance companies mandatorily invest 5 per cent, 4.5 per cent and 4 per cent of their lending respectively to the deprived sector.

Thapa indicated towards the revision of current 5 per cent spread rate.

He said that the NRB was not happy with the 5 per cent spread rate which he said was comparatively higher than other countries.

“If the banks exercise that high spread rate in the landlocked country like Nepal, it would have negative impact on the business and investment. It will not contribute to private sector development,” he said.

Similarly, he said that the central bank was planning to implement new policies in terms of financial technology (fintech).

“The NRB has established Payment and Settlement Department at its central office last year. Fintech is our priority,” he said.

He said that the central bank was promoting private sector development through monetary policy, structural reforms and financial technology.

President of the CNI Hari Bhakta Sharma said that the country needed a critical departure in policy.

“We are having traditional monetary policies in many years gone by. The private sector is waiting for some innovative approaches and policies for the monetary sector,” he said.

He urged the NRB to implement the national payment gateway to facilitate real time payment.

“The new monetary policy should try to contain the interest rate of industrial lending. The businessmen are paying more than 12 per cent interest of the loan which they obtained at the rate of 7 per cent a year ago. If not controlled in time, it will have negative impact on export, inflation, and export,” he said.

He urged the NRB for policy provisioning to increasing lending to the productive sectors that could contribute to the economic growth.

Anal Raj Bhattarai, member of CNI National Council, had presented the suggestions for the new monetary policy.

He suggested developing cash less economy, reducing spread rate, open capital account convertibility and redefining the productive sectors.

The businessmen had urged for the provision of not closing the banks and financial institutions for more than two days in a row and conduct cheque clearing on Fridays too.