First Business News Portal in English from Nepal
KATHMANDU: The Federation of Nepalese Chamber of Commerce & Industries has again requested to postpone the current capital loan guidelines implemented from last October 1 for two years. A delegation led by Federation President Shekhar Golchha, consisting of officers, state chapter presidents and members of the executive committee, met with Rashtra Bank Governor Mahaprasad Adhikari on Tuesday and made the request.
The federation has also drawn attention to the fact that Nepal Rastra Bank should take special initiatives for liquidity management, interest rate stability and price stability due to internal and external factors affecting the economy.
“The private sector of Nepal is probably going through the most difficult situation so far,” Chairman Golchha said, “The Central Bank should make the private economy viable through measures such as interest rate stabilization, suspension of the new system related to current capital loans, etc. Even the monetary policy review could not address these issues.
It is stated in the press release of the Federation that the Federation has taken forward the campaign to save the economy and has met the top leaders of the country’s major political parties, Chief Minister and Finance Minister Janardan Sharma and asked them to solve the problem.
“Since there has been a decline of up to 60 percent in sectors such as cement, dandy, real estate business, construction, automobile, etc., President Golchha requested the governor officer to immediately create an environment that will make the entire private sector, including these sectors, operational,” said the statement. Private sector suggestions are liquidity management and interest rate stability.
Through the monetary policy review, it has been arranged that the average interest rate gap of commercial banks should be maintained from 4.4 percent to 4 percent and the average interest rate gap of development banks and finance companies should be maintained from 5 percent to 4.6 percent. It is mentioned in the statement that there is a strong possibility that this arrangement will prevent the interest rate from increasing.
Both the government and the central bank should find ways to immediately flow liquidity to the market and reduce the interest rate, at least one year should be provided to renew the loan, the mandatory cash ratio CRR should be reduced by one percentage point, liquidity management measures should be adopted by disbursing the funds in the government treasury, the amount going to the local level.
The federation has also given suggestions, including the provision of 100 percent calculation for a certain period. The federation also suggested that the government should try to increase capital expenditure and implement the automatic process mentioned in the budget to attract foreign investment.
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