Chamber of Commerce Reacts to Nepal Rastra Bank's Monetary Policy for Fiscal Year 2081/82

The Chamber of Commerce shared its views on the monetary policy announced by Nepal Rastra Bank for the financial year 2081/82, noting several key points:

1. The monetary policy is comparatively cautious and flexible.

2. Bank rates and policy rates have been reduced, with the bank rate now at 6.5% (down from 7%) and the policy rate at 5% (down from 5.5%), facilitating lower interest rates.

3. Measures for the rehabilitation of the construction sector are acceptable.

4. The import limit for goods via draft/TT has been raised from US$35,000 to US$50,000, and through Document Against. Payment/Acceptance from US$60,000 to US$100,000, which is positive.

5. The loan loss provision for good loans has been reduced from 1.20% to 1.1%.

6. Reviewing credit information and blacklisting guidelines to amend blacklisting provisions based on check dishonor and suspended accounts is positive.

7. Removing the Rs 20 crore credit limit to encourage institutional share trading is positive, but the demand to maintain a 100% risk weight on loans above Rs 50 lakh was not addressed.

8. The demand to maintain a 100% risk weight on loans above Rs 50 lakh and the 80-20 ratio for real estate loans was not fulfilled.

9. Extending the arrangement to adjust loans through Variance Analysis to Shrawan 1, 2082, solves short-term issues but is impractical for the long term.