Half-yearly monetary policy review: Old policy to be continued

KATHMANDU:  Stating that COVID- 19 still exists, Nepal Rastra Bank has continued most of the old policy in its half-yearly review. Governor Maha Prasad Adhikari informed about the policy in the half-yearly review made public by NRB on Sunday.

This time, NRB has added the facility of rescheduling the loan. The NRB has said that there is still a problem in the industries and businesses and will provide a one-time rescheduling facility to the borrowers.

Governor Adhikari said that monetary policy has given a kind of impetus. He says that despite the huge impact caused by COVID-19, the situation is not so bad now.

According to Governor Adhikari, those who are active till mid-December will be given the facility to reschedule the loan once and for all till mid-July 2078 BS by collecting only 5 per cent interest.

Similarly, electronic payment transactions will be encouraged, said Governor Adhikari. The monetary policy has been reviewed to take strict action against the banks that do not invest in the specified areas.

The existing provisions including mandatory cash ratio, statutory liquidity ratio have been kept unchanged while the valuation ratio of loans has also been kept unchanged.

However, as economic activity returns to normal, these policies are being reviewed, the Governor said.

The monetary policy review has also mentioned that the policy of giving priority to concessional loans for hydropower projects with a capacity of less than 10 MW will also be taken.

He informed that consumer price inflation remained balanced. The foreign trade deficit has also improved and remittance inflows have increased by 11 per cent, the governor said.

He said that the current account was in deficit but the balance of payments was in surplus and foreign exchange reserves were in good condition.

Stating that the deposit mobilization has increased in an encouraging manner and the credit has also increased in a more encouraging manner, the Governor said that the affected people are also making good use of the concessional loans.

Elaborating that interest rates have been gradually declining and financial access has also improved, he said that four more commercial banks are yet to reach the local level. Governor Adhikari informed that the remaining four branches of the commercial bank will soon reach the local level.