Monetary Policy a respite to pandemic-hit businesses: Private sector

KATHMANDU: The private sector has welcomed the monetary policy 2021-22. They said that the macroeconomic policy will prove a respite to the Covid-19 affected industries including small and medium enterprises (SMEs) and tourism businesses if it is implemented properly.

The Federation of Nepalese Chambers of Commerce and Industries (FNCCI) has said that the continuation of refinance, restructuring and rescheduling facilities will help yield positive results mainly for the coronavirus-affected industries. “The provision of charging a maximum premium of two point percent in the base interest rate in the credit of up to Rs 10 million to be taken by the SMEs will help increase access of these businesses to bank loans,” reads a press statement issued by the FNCCI.

In addition, the scrapping of the credit to core-capital plus deposit (CCD) ratio could also help maintain adequate liquidity in the market, FNCCI said. Nepal Rastra Bank (NRB) through the monetary policy, has asked the banks and financial institutions (BFIs) to maintain the loan to deposit ratio at up to 90 percent by annulling the mandatory CCD ratio. Under the rule, the BFIs were needed to maintain the CCD ratio at 85 percent, which means that banking institutions cannot extend more than 85 percent of the deposit and core capital as loans.

Similarly, the Confederation of Nepalese Industries (CNI) has said that the flexibility in loans for the pandemic-affected industries will help them continue and expand their businesses while increasing the economic activities. “The announcement to waive the penalty amount in the interest dues of the tourism businesses will support the recovery of the related businesses,” reads a press statement of the CNI.

Fiscal Nepal |
Sunday August 15, 2021, 09:09:03 AM |

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