The Confederation of Nepalese Industries (CNI) has submitted suggestions to the Nepal Rastra Bank (NRB) on the eve of announcement of the monetary policy for the coming fiscal year 2021/22.
CNI President Satish Kumar More submitted the suggestions to NRB governor Maha Prasad Adhikari on behalf of the confederation on Monday.
Presenting suggestions, he said that many businesses have been seriously affected due to COVID 19 and their continuity is the main need of the hour.
He said that the facilities provided through monetary policy last year also helped in the rapid recovery of the economy and that the NRB would focus on that this year as well.
In the suggestions, the CNI has mentioned that NRB should work on liquidity management, taming interest rate, continuity of refinancing facility and control of inflation.
The confederation has also suggested that the facility of restructuring and rescheduling of loans and interest should be provided as the industry and business are facing problems in paying installments and interest due to the pandemic.
In order to contribute to self-employment and job creation by developing innovation and entrepreneurship, the confederation suggested that the practice of collateral-based credit flow should be shifted to project-based credit flow.
Similarly, separate refinancing funds should be set up for large, small and medium enterprises and the refinancing limit should be 20 per cent of the total loan or Rs. 200 million, whichever is more.
The confederation has demanded that the interest rate on loans extended to the tourism and aviation sectors, which have been severely affected by the pandemic be limited to 5 per cent.
The CNI has emphasised on the effective implementation of the interest rate corridor, the system or framework that is designed by the Central Bank to stabilise the short term interest rates by implementing short term monetary instruments like interbank rate, repo rate, treasury bills and others by setting the upper limit and lower limit of the interest rate.
The confederation has suggested to encourage the banks and financial institutions to provide at least 2 per cent higher interest rate on amount received from remittance than the interest earned on general savings for a certain period of time.
Accepting the suggestions, governor Adhikari said that the NRB would include the genuine suggestions made by the CNI in the upcoming monetary policy.
“We will implement the suggestions made by all sectors in terms of business organisation within the limits of NRB,” said Adhikari.
Governor Adhikari said that the NRB was providing policy assistance to save the COVID-19 affected industries and businesses, adding that the monetary policy for the coming fiscal year would be prepared keeping the revival of the economy at the center.
Source : TRN,
