Institutes and NRB come together to discuss issues to be addressed by monetary policy

Nepal Rastra Bank (NRB) is in the last phase for the preparation of monetary policy. Different departments such as bankers association, Nepal Chamber of Commerce, and the concerned authorities have provided several suggestions to be addressed by the monetary policy. The officials of NRB invited the concerned authorities from these sectors to discuss on their suggestions and demands.

 Governor Chirnajibi Nepal asked all the participants to put forward their opinion on the monetary policy. All the three umbrellas of industrial associations along with Nepal bankers Association and media were present in the event. The discussion throughout the event revolved around the main issue of big merger among A graded commercial banks. Governor called all the representatives of banks in order to start searching for an adequate corporate partner to go into merger before the monetary policy. There were several other discussions that were addressed in the event:

President of Federation of Nepalese Chamber of Commerce and Industry, Bhawana Rana, forwarded a request to implement a spread of 3% interest in the banks’ deposits and loans. The difference between the deposit and interest rate of banks can currently be around 4.5%. Private sectors have been demanding to decrease this spread to around 3%.

Besides, the president of Nepal Chamber of Commerce, Kamlesh Agrawal pointed out the importance of process focused rather than forceful merger between banks. Mr. Agrawal explained “Corporate merger is more important than a marriage. If banks start getting into forceful merger, employees might face problem.” Agrawal also supported Rana’s claim of at most a 3% of spread rate. Moreover, he further proposed the establishment of credit fund worth Rs 1 kharba.

Gyanendra Dhungana, the president of Nepal bankers Association and CEO of Nepal Bangladesh Bank, explained although banks are ready to bring down the spread rate back to a single digit yet the lack of investment avenues have made it difficult. He also requested some benefits to go into merger and consideration on the cooling period of CEOs and deputy CEOs.

The president of Development Bankers’ Association further agreed with Mr. Dhungana. He explained the lack of proper sources on investment avenues have escalated the difference between banks’ deposit interest rate and credit interest rate. He also emphasized the importance of merger considering one’s strength and weakness rather than simply diving into forceful merger.

 President of Nepal Laghubitta Sangh, Ramchandra Joshi demanded for benefits to invest in agricultural sector. He explained, in the presence of competitiveness from commercial and development banks, it becomes difficult for micro finance institutes to expand their business in agricultural sector.

Representative from Federation of Nepal Gold and Silver Dealers further suggested the expansion of Nepal’s own cultural jewelry market. He argued several quantitative restrictions while importing gold and silvers from international market should be removed so that our market can also be flourished globally.

President of Investment Forum, Chotelal Rauniyar also suggested the policy to provide broker licenses to banks to be implemented at the soonest possible.

By the end of the program, Governor Chiranjibi Nepal requested each one of them to support the policies introduced by NRB. He further assured that the policies implemented by NRB are after a careful study and proper evaluation. He requested commercial banks to go into merger into a stipulated time and not to repeat the history of delay like in previous cases.