Nepal Rastra Bank unveils monetary policy; Concessional loan to for tourism sector

Kathmandu / July 17: Nepal Rastra Bank has unveiled the Monetary Policy (MP) for Fiscal Year 2020/21.

Governor of NRB Maha Prasad Adhikari unveiled the policy.

The policy is focused on economic stability and achieving economic growth of 7pc in 2020-21.

As per new provision, the banks will now require to invest 15 per cent of their total loan portfolio in the agriculture sector and 10pc in the energy sector.

The banks will be allowed to issue energy bond refinancing loan facility for Small and medium-sized enterprises (SMEs) at 2pc.

The previous installment and interest payment period of loans as of mid-July has now been extended till mid-December while moratorium on loan, interest rate recovery has been extended till mid-Dec.

The Monetary Policy promotes merger among banks and financial institution (BFIs), however, forced mergers have not been encouraged.

Likewise, the CCD ratio for banks has been raised to 85 pc from existing 80pc.

The central bank has revised CCD ratio, which it considers the anchor of Nepal’s financial sector stability, to 85% from 80%. The latest revision will enable BFIs to release an extra Rs 183.3 billion in loans, considering total deposit of Rs 3,666.6 billion in the banking sector.

The CCD ratio stands for the credit to core capital plus deposit ratio. It is the limit until which the banks are allowed to issue the loans and advances.

Meanwhile, the issuance of licenses for new finance companies has been halted for the time being.

According to the policy, facilities of bankers will be reviewed while allowances are to be discouraged.

The MP has barred the BFIs from charging fees on interbank ATM withdrawal which the Nepal Bankers’ Association (NBA), Development Banks’ Association Nepal (DBAN) and Nepal Finance Institutions Association (NFIA) had officially decided to charge from July 16.

As per the MP, the Banks and Financial Institutions (BFIs) will have to provide inter-bank ATM cash withdrawal free of charge till COVID-19 crisis is over.

Concessional loan to be provided for tourism sector

The government has decided to introduce concessional loan to help the tourism sector revive from the loss caused by COVID-19 pandemic, said Maha Prasad Adhikari, Governor of Nepal Rastra Bank (NRB), while making nation’s monetary policy public today.

Adhikari said that the loan would be provided to airline services, hotel, restaurants and other businesses in the tourism sector.

Likewise, the monetary policy has mentioned that the tax dues of the tourism industry till the end of Fiscal Year 2019/20 could be cleared by December, 2020.

Also, those businesses, which have been extensively affected by the pandemic, could clear their tax dues by the end of Fiscal Year 2020/21.

Meanwhile, according to RSS, Governor Adhikari has said that the monetary policy of FY 2020/21 was focused on minimising the effects of COVID-19 pandemic on the economic regime of the nation.

The government has aimed to gain seven per cent financial growth in the FY 2020/21. The monetary policy has incorporated some issues to fulfill the target.

The policy stresses on investing on agriculture, energy, small and minimum enterprises to recover the loss caused by the pandemic.

The policy also aims to move Agriculture Development Bank as the leading bank for the development of agricultural sector.

The banks and financial institutions will also be motivated to invest on agriculture sector, said Governor Adhikari.

Related News

Comments are closed

TOP NEWSview all

KMC to build 100-bed special hospital

Nepal’s proposal to graduate from LDC status to be presented in UNGA for endorsement

World Bank to provide US $ 60 million to strengthen Nepal’s higher education

32,500 metric ton Urea arrives in Nepal

Writ petition filed in Supreme Court against reshuffle of cabinet




Positive Development Media Pvt. Ltd. / Regd. No: 232 / 073-74

Newbaneshwor
Kathmandu, Nepal

4479401


Editor : Mr. Divesh J.B. Rana Chairperson : Mr. Kishore Thapa


Counter:
Web Counter