FNCCI delegation meets new NRB governor, calls for investment-friendly measures

KATHMANDU: Newly appointed Governor of Nepal Rastra Bank (NRB), Dr Biswo Nath Poudel, said that monetary and other central bank policies will be determined based on policy stability and discussions with stakeholders.

During a meeting with a delegation from the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) at the NRB office on Wednesday, Governor Poudel said that the central bank's decisions will be predictable. "The private sector is the driver of the economy. Stability is essential for the economy to be dynamic. Decisions must be predictable. My view is that instead of making sudden decisions in the banking sector, engaging in discussions with stakeholders and moving forward together can maintain policy stability," he said. He added that NRB will play a role in making the economy dynamic.

Congratulating the new governor, FNCCI President Chandra Prasad Dhakal suggested that the central bank introduce programmes that are investment-friendly and boost morale. "In the context that credit expansion has not been possible even with low interest rates on loans in the current fiscal year, it seems necessary to adopt monetary and non-monetary measures to boost the morale of the private sector. In the context that policy instability is the main barrier to investment, we have declared an investment decade and are demanding integrated policies and stable policies for 10 years. The central bank's policies need to be stable," he said.

FNCCI President Dhakal added that for the overall economy to be dynamic, the rural economy must also be dynamic, and remittance inflows should be made open with the Working Capital Loans Guidelines eased. He mentioned that high interest rates in previous years had led to increased non-performing loans and suggested that provisions for loan rescheduling and restructuring should be available.

On the occasion, FNCCI Immediate Past President Shekhar Golchha mentioned that although most economic indicators are positive, the overall economy remains undynamic. Similarly, FNCCI Senior Vice President Anjan Shrestha suggested that bank liquidity be invested in productive sectors with differentiated interest rates for loans given to industries and businesses. FNCCI Vice Presidents Hem Raj Dhakal, Jyotsna Shrestha, and Treasurer Bharat Raj Acharya recommended that the central bank's monetary instruments should aim to create market demand.

The FNCCI delegation further suggested that the provision in the government's budget statement—ensuring that productive industries receive loans at lower interest rates than other businesses—be immediately implemented by creating a procedure, that provisions be made for refinancing small and medium enterprises, and that project loans be made available based on project prospects.