“All branches of commercial banks will remain closed from October 23 to 27,” informed NBA Executive Officer Anil Sharma.

He advised the customers to opt for online banking as the banks are promoting digital services.

Earlier, some branches used to remain open even during the festival season. However, this year, the NBA has decided to close all the branches in view of the coronavirus pandemic.

This year, the Dashain festival, also known as Bijaya Dashami, is falling on October 26. It is the most auspicious festival in Nepal. The festival marks the victory of Goddess Durga over the Demon Mahishasura.

Stay Tuned to NepaliSansar for Latest Festival News!

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The post Dashain Festival 2020: Nepal’s Commercial Banks To Remain Closed For Five Days! appeared first on Nepali Sansar.

In the discussion program held in Kathmandu, NRB Governor Chrianjibi Nepal said that the policy will create measures to support and achieve targets outlined in the Budget for FY 2018-19, which covers economic growth, inflation projection, infrastructure and agriculture goals.

“The budget for Fiscal Year 2018-19 has set targets on the basis of the country’s improving business and economic climate in the last couple of years. The monetary policy will try to capture this momentum of growth in the country which will lead to achieving the set economic growth and development targets,” said Nepal Governor.

The governor also mentioned that the monetary policy will create certain measures to arrest inflation within the targeted 6.5 percent range and put stability in the financial sector first.

Experts Take On Policy
Former Finance Minister Madhukar SJB Rana opines that the Central Bank should look to solve key monetary issues like people’s access to financial institutions and lack of stability in financial policies through the new policy.

Former NRB Governor Dipendra Bahadur Kshetry insists the Central Bank should not only work towards creating support measures for accomplishing the budget’s goals, but also enhance the regulatory framework.

“The Central Bank has mandated banks to inject at least 25 per cent of their total loan portfolio to various identified productive sectors. But are banks lending as per this provision?” Kshetry asks.

Nepal Bankers Association President Gyanendra Dhungana says that the monetary policy should be flexible to ease capital formation in the country.

Dhungana adds that the policy should create a measure that encourages mergers between banks and financial industries and increase the overdraft facility limit for business loans, currently at 15 per cent.

Nepal Financial Institutions Association (NFIA) President Saroj Kaji Tuladhar thinks that the policy should cater to the margin lending issue in the secondary market. He persuaded the Central Bank to increase the loan-to-value ratio by 10% on housing loans since the current monetary policy has squeezed housing loans.

Nepal’s Monetary policy was unveiled on June 11^th, 2018 addressing several issues concerning Nepal’s finances which included the exchange rate hedging facility for foreign investors who seek to make investments in the country’s infrastructure sector.

Through this policy, the Central Bank will make more room for FDI and help the government achieve its targeted economic growth of 8 percent.

The post Nepal Monetary Policy 2018-19: Current Scenario, Expectations and the Way Forward appeared first on Nepali Sansar.

Stakeholders say that the country will need more than Rs 500 billion in the next fiscal year to meet the targeted economic growth rate of 8 percent.

Taking into perspective the targeted growth rate, they said that the suggested expansionary monetary policy will keep the money flow in the market and curb interest rates. Both of these aspects are important factors for achieving the targeted growth rate and keeping inflation within the targeted 6.5 percent.

“Amid lack of adequate investment funds, it will be tough for the government to achieve the targeted economic growth rate in 2018-19. In such a situation, the central bank should draft a monetary policy that is as expansionary as possible even if it adds to the inflationary pressure to some extent,” says Gyanendra Dhungana, President of Nepal Bankers Association (NBA).

Dhungana further asked the central bank to consider getting rid of the credit-to-core Capital Plus Deposit (CCD) ratio limitation in the banking sector through the enaction of the monetary policy explaining that liquidity could be restrained even by maintaining the Cash Reserve Ratio (CRR) and Statutory Liquid Ratio (SLR).

What Key Stakeholders Said

Private sector representatives present at the meeting encouraged NRB to address various lapses of the budget that have eaten away at the business sector through monetary policy.

 “Among others, the government’s policy to scrap the VAT rebate system on different essential goods and the inability of the budget to ensure stability in interest rates in the banking sector are discouraging. The monetary policy should address these bottlenecks of doing business in Nepal,” says Shekhar Golchha, Senior Vice-President of the Federation of Nepalese Chambers of Commerce and Industry.

The Vice-President of Nepal Chamber of Commerce (NCC) Kamalesh Kumar Agrawal also expressed his views on the plan saying that the monetary policy should also facilitate production and supply of goods.

Kumar stressed on the need to limit interest rates within the 9 percent limit on loans in the banking sector, redefine productive & non-productive sectors and permit the usage of high-denomination Indian currency in the domestic market.

Speaking to the members, Nara Bahadur Thapa, Executive Director of NRB, said that the monetary policy for FY 2018-19 will focus on:

• Accelerating the present economic growth momentum
• Narrowing down the trade deficit
• Increasing the flow of loan to Small Medium Enterprises (SMEs)
• Controlling rising interest rate
• Increasing public access to financial services

“The market is already witnessing inflationary pressure and it will likely increase in the next fiscal year. The monetary policy will be prepared by adopting cautious measures to control inflation,” says Thapa.

Addressing the event, NRB Governor Chiranjibi Nepal said that the monetary policy will fuel the budget’s target of achieving the expected economic growth in FY 2018-19 and restricting inflation to 6.5 percent.

“Nepal has witnessed an economic growth rate of over 6 percent for two consecutive years despite political instability and frequent changes in government. As the country now has a stable government and the supply-demand situation is improving, the 8 percent economic growth target in 2018-19 is achievable,” says Chiranjibi.

The post Key Stakeholders Urge NRB To Expand Monetary Plan appeared first on Nepali Sansar.

Nepal Federal Budget 2018-19 drew a mixed response from all sections of the society. While some called it ‘unrealistic’, some called it ‘development-friendly’ for the nation.

Let us look some of the responses to Nepal Federal Budget for the Fiscal Year 2018-19 pre and post release:

KP Sharma Oli, Prime Minister of Nepal, CPN-UML

The Prime Minister is very elated and encouraged at the Federal Budget for FY 2018-19 his government presented in the Nepal Parliament on May 29, 2018. In a response, he said the budget has come as a support to the slogan of ‘Prosperous Nepal, Happy Nepali’.

“The budget has been introduced keeping with practical measures. It would lay the foundation for prosperous Nepal,” he told the press. He said the tax net would be widened to meet the government’s revenue targets.

Sher Bahadur Deuba, Ex-Prime Minister of Nepal, Nepali Congress

Meanwhile, the prime opposition to the ruling Nepali Government and the ex-PM Sher Bahadur Deuba termed the budget as ‘difficult to implement’. He says tax burden would hamper the growth in productivity.

“Time has come for the government with two-thirds majority to walk the talk,” he adds.

Gagan Thapa, Law Maker, Nepali Congress

NC Lawmaker Thapa takes a neutral stand saying the budget has neither gone against the public expectations nor taken any risk.

The politician and lawmaker of the opposition Nepali Congress party Gagan Thapa says the budget has neither gone against the expectations of Nepali public nor took any risk in the process.

Nara Bahadur Thapa, Executive Director, Nepal Rastra Bank (NRB)

“The budget needs to introduce new programs to increase employment opportunities by promoting small and medium industries in particular,” Thapa said speaking at a pre-budget session.

According to him, the central bank opines that the budget would add to the country’s growth trajectory facilitating resource availability on a large scale, curtailing widening trade deficit, addressing concerns of tourism sector, among others.

Shekhar Golchha, Senior Vice-President, Federation of Nepalese Chambers of Commerce & Industry

“Reducing transit costs, developing infrastructure, retaining capable manpower in the country and reviewing the challenges that the country has been facing after joining the World Trade Organization are among other issues, which the government should address through the budget,” Golchha said at a pre-budget session.

Productive sector has been facing threat due to the inefficiency of bank and financial institutions. Hence, the government, through the fiscal budget, and central bank, through monetary policy, must address the problems faced by the industrial sector, he adds.

Govinda Nepal, Former Member, National Planning Commission (NPC)

Govinda wants the government to ensure required financial support and enhanced market access to the country’s agriculture sector, along with a needed boost for the country’s agriculture products to perform well in the international value-chain.

The government to ensure the country’s farming community has timely access to the required agricultural inputs such as fertilisers and seeds, he adds.

Rewat Bahadur Karki, Chairman, Securities Board of Nepal (SEBON)

According to Karki, the government should focus on capital markets to address the growing needs of resources to be invested in the country.

Stating that the government should come up with policies to boost Nepal’s capital markets, Karki said, “As the country has entered a federal system, the initiative could help ease the dearth of capital.”

Gyanendra Prasad Dhungana, President, Nepal Bankers’ Association

Gyanendra Prasad feels that there is a need to address asset-liability mismatch in the country’s financial sector when it comes to long-term funding.

He says, “the problem can be solved to a large extent if the government waives taxes on long-term financing.”

Rameshwore Khanal, Former Finance Secretary

Commenting on the budget, Khanal opined that the Finance Minister might have realized that the distributive and populist programmes similar to that launched by past governments would not add to the country’s prosperity.

Addressing that, the federal budget encouraged investment in the economy considering the factor that low investment’s role as a major constraint for economic growth, he adds.

Let’s hope the new budget will address the existing concerns and add to the nation’s prosperity!

Also Read: 

• Nepal Federal Budget FY 2018-19: Infrastructure Gets Major Push!
• Nepal Federal Budget FY 2019-20: Highlights & Announcements

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