Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has drawn the attention of Nepal Rastra Bank (NRB) citing that internal and external factors are affecting the economy in multiple ways.
The last time the banks and financial institutions started increasing the interest rate of loans, the delegation of FNCCI drew the attention of NRB to protest against the move.
The Federation drew the attention of the NRB on issues such as liquidity management, interest rate stability, external sector management and price stability.
The team led by FNCCI president Shekhar Golchha met Acting Governor of NRB Dr. Neelam Dhungana Timsina along with high officials of NRB on Monday and requested to address their demands. Stating that the private sector is going through the most difficult situation so far, Golchha said that the attention of the central bank has been drawn to adopt a timely policy to address such a situation.
“The central bank should make the economy vibrant through measures such as interest rate stability and postpone the implementation of the new system related to working capital loans,” Golchha said.
During the meeting, Dhungana said that the NRB would study the suggestions of the FNCCI and find solutions at the earliest. During the meeting, the Federation submitted an 18-point memorandum to the NRB regarding liquidity and external sector management.
It has been emphasised that the government and the central bank should use all the necessary tools to keep the interest rate at a single digit in order to increase investment and make the economy vibrant.
It has been emphasised that special policy arrangements should be made by the government and the central bank for interest rate stability.
As the cost of enterprise business increases when the interest rate increases, the Federation has also drawn the attention of the NRB to ensure that the premium does not increase when the base rate increases.
The FNCCI said that due to the increase in the price of raw materials including fuel, the market price is constantly rising and since the import of many goods has been stopped directly and indirectly for a long time, it is difficult for the market to run.
“Due to multiplayer effect, revenue collection has also decreased by about 20 per cent as the market is not functioning,” FNCCI said.
“Regarding the past experience where the deposit did not increase when the interest rate of deposits increased, the private sector was negatively affected due to the high interest on loan, a policy should be adopted to keep the interest rate within the desired limit and keep the economy running,” it said.
Due to the uncomfortable situation of the country, the Federation has also requested to extend the loan principal interest payment period.
The Federation emphasised that the CD ratio should be revised and increased in the short term.
The FNCCI said that the CRR should also be reduced in the short term and the funds should be transferred to the market, drawing the attention of the NRB to reduce the spread rate.
It has requested to encourage citizens to transfer remittances to bank financial institutions through the remittance smart card along with the system of counting the deposits of the local bodies as 100 per cent.
Source : TRN,
