The private sector has asked the central bank to crack whip on soaring interest rates.
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) today – submitted a memorandum to the Nepal Rastra Bank (NRB) governor Dr Chiranjibi Nepal asking him to tame the rising interest rate that has added doing business cost.
The abrupt hike in interest rate has made an adverse impact on industries and enterprises, FNCCI president Bhawani Rana told governor Dr Nepal submitting a memorandum at the latter's office.
A delegation led by Rana called on the central bank governor today to draw his attention on the effects of soaring interest rates on deposits on lending rates.
The hike in lending rates will erode the competitive capacity of domestic industries, increase project costs and discourage entrepreneurs and industrialists to start new projects, the delegation told the central bank governor. "The high rates will make it difficult to increase industrial production and narrow widening trade deficit that are key targets of the fiscal and monetary policy."
FNCCI has also suggested the central bank to address high-interest rates and manage liquidity problems that banks are facing at present. Institutional depositors are blamed for driving interest rates higher by bargaining with banks and financial institutions for better rates. The umbrella organisation of the private sector has suggested that the share of institutional depositors – including Employees Provident Fund, Citizen’s Investment Fund and welfare bodies of security agencies – in total deposits should be reduced to 25 per cent from existing 45 per cent.
The FNCCI has also asked the central bank to lower the difference between lending and deposit rates to 3 per cent from existing 4.5 per cent, bring remittances through formal channel, bring money from informal markets to bank and financial institutions, and increase the government’s capital spending. Likewise, it has suggested central bank to bring auto loan down to 50 per cent and introduce credit rating for any private limited company to make borrowings of Rs 1 billion or above.
The central bank governor Dr Nepal responding to the private sector assured that the central bank will take needful initiative to tame rising interest rates.
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) today – submitted a memorandum to the Nepal Rastra Bank (NRB) governor Dr Chiranjibi Nepal asking him to tame the rising interest rate that has added doing business cost.
The abrupt hike in interest rate has made an adverse impact on industries and enterprises, FNCCI president Bhawani Rana told governor Dr Nepal submitting a memorandum at the latter's office.
A delegation led by Rana called on the central bank governor today to draw his attention on the effects of soaring interest rates on deposits on lending rates.
The hike in lending rates will erode the competitive capacity of domestic industries, increase project costs and discourage entrepreneurs and industrialists to start new projects, the delegation told the central bank governor. "The high rates will make it difficult to increase industrial production and narrow widening trade deficit that are key targets of the fiscal and monetary policy."
FNCCI has also suggested the central bank to address high-interest rates and manage liquidity problems that banks are facing at present. Institutional depositors are blamed for driving interest rates higher by bargaining with banks and financial institutions for better rates. The umbrella organisation of the private sector has suggested that the share of institutional depositors – including Employees Provident Fund, Citizen’s Investment Fund and welfare bodies of security agencies – in total deposits should be reduced to 25 per cent from existing 45 per cent.
The FNCCI has also asked the central bank to lower the difference between lending and deposit rates to 3 per cent from existing 4.5 per cent, bring remittances through formal channel, bring money from informal markets to bank and financial institutions, and increase the government’s capital spending. Likewise, it has suggested central bank to bring auto loan down to 50 per cent and introduce credit rating for any private limited company to make borrowings of Rs 1 billion or above.
The central bank governor Dr Nepal responding to the private sector assured that the central bank will take needful initiative to tame rising interest rates.
No comments:
Post a Comment