FNCCI says monetary policy is 'positive and balanced' and will boost private sector morale

KATHMANDU: Federation of Nepalese Chambers of Commerce and Industry (FNCCI) on Wednesday welcomed Nepal Rastra Bank’s monetary policy for fiscal year 2026/27, calling it 'positive and balanced'. The federation said the policy will boost the morale of the private sector.

FNCCI said the policy strikes a balance between price stability, financial sector stability and higher economic growth while the economy gradually recovers. It noted the policy recognises the private sector’s decisive role in meeting the government’s 7% growth target.

Meanwhile, FNCCI President Anjan Shrestha said the policy’s flexible approach to expanding private investment, boosting production, creating jobs and mobilising economic activity is appropriate. He said attempts have been made to address issues FNCCI has long raised.

He added, “The provision to remove the condition of unlimited liability created on the basis of personal guarantee, the management of non-performing loans in sick industries, and the measures to revive stressed loans are positive. Similarly, the determination of the limit for share-pledged loans based on institutional capacity and the provision to further ease the loan-to-value ratio for large electric vehicles used in public transport are positive.”

In particular, the umbrella organisation of private sector welcomed the central bank’s decision to keep the policy rate, standing deposit facility rate and bank rate unchanged. It also noted that the cash reserve ratio, statutory liquidity ratio and standing liquidity facility will remain the same. FNCCI said these steps will preserve policy stability and make the business environment more predictable.

FNCCI praised measures to accelerate the digitalisation of banks and financial institutions. It also welcomed efforts to reduce financial costs, improve service quality, simplify regulatory arrangements and ease foreign exchange rules to facilitate trade and investment.

The organization also urged that forthcoming directives from the central bank explicitly cover restructuring and rescheduling of loans for small, medium and large industries. It said guidance on sectoral loans should also be made clear.

Shrestha said the success of the monetary policy depends on effective implementation. He stressed that to meet the credit growth target of 11% and to use ample banking liquidity, lending must reach industries, agriculture, tourism, energy, information technology and infrastructure. He added that export-oriented firms and small and medium enterprises must also receive concessional credit. “Economic recovery cannot gain momentum until credit expands in the real productive sectors,” he said.

Furthermore, FNCCI called for parallel progress on government economic reforms, investment-friendly legal changes, timely capital expenditure and faster project implementation. The chamber said the expected transformation requires coordination between monetary and fiscal measures.

It also urged deeper consideration of requests to relax loan classification and provisioning rules and to ease watch-list and blacklisting provisions for two years. FNCCI asked for advancement of a second-generation financial reform programme focused on recapitalisation, non-performing asset management, risk-sharing mechanisms and development of financial instruments for the productive sector.

The federation said it will continue to work with the central bank and the government to strengthen the private sector’s competitiveness, expand investment and support sustainable economic development.