NCC welcomes monetary policy, urges abolition of Working Capital Loans Guideline
KATHMANDU: Nepal Chamber of Commerce (NCC) has stated that the monetary policy for fiscal year 2025/26 is positive and facilitates financing.
The chamber praised the flexible provisions aimed at reducing interest rates, increasing credit flow and providing relief to banks under stress from non-performing loans.
NCC noted that the policy will revitalise the financial sector through economic recovery and smoother credit flow. In the statement issued today, the NCC said boosting private sector credit by 12% in the next fiscal year could resolve the current excess liquidity issue.
“The bank rate, which is the upper limit of the interest-rate corridor, has been reduced from 6.5% to 6%, and the policy rate has been cut from 5% to 4.5%. This is expected to manage market liquidity and prevent interest rates from rising,” NCC’s statement reads.
NCC welcomed the increase in the loan limit for purchasing and constructing private residential properties from Rs 20 million to Rs 30 million. It added that loan-to-value ratios of up to 80% for housing credit and 70% for other purposes will expand business in the real estate sector and help revitalise the economy.
The chamber also endorsed provisions for rescheduling and restructuring loans to the housing and real estate sectors, as well as arrangements to revive construction amid its slowdown. It said updating the Working Capital Loans Guideline to match the cash-flow cycles of sectors such as agriculture, small industries, education, and health is a positive step.
NCC has called for clearer guidance on reviewing loan classification and provisioning rules. It welcomed the allowance of credit up to Rs 1 million for agricultural or commercial loans and the inclusion of loans up to Rs 30 million as SME credit within specified sectors, saying these measures will encourage small agricultural lending and facilitate low-interest finance.
The chamber noted that reviewing interest-capitalisation rules for energy-sector loans would provide relief to hydropower borrowers. It also welcomed the increase in the single-client loan limit for margin loans from Rs 150 million to Rs 250 million against share collateral, and the refinement of the cheque-dishonour blacklisting system.
NCC approved the rise in foreign-exchange facilities for Nepali nationals travelling outside India from $2,500 to $3,000 per trip. It likewise welcomed the provision of collateral-free loans of Rs 300,000 to Rs 500,000 for youths seeking foreign employment, urging effective implementation.
The private sector organisation urged that the Working Capital Loans Guideline be abolished rather than merely reviewed, given the current financial strain. It emphasised the need to revitalise the economy through effective coordination of the budget and monetary policy.
