KATHMANDU: The Governor of Nepal Rastra Bank (NRB), Maha Prasad Adhikari, announced today that the newly released monetary policy will facilitate the expansion of loans by banks and financial institutions.
In a media briefing, Governor Adhikari expressed optimism that the policy will invigorate the market by making loan expansion more accessible.
Adhikari explained that the monetary policy introduces a more flexible arrangement for capital funds, enabling banks and financial institutions to increase their loan disbursements despite having ample liquidity.
The NRB has set a target of 12.5% loan disbursement growth for the current fiscal year. Additionally, the policy projects a broad money supply growth of 12% for the same period.
The policy also addresses issues in the construction sector, which has faced challenges due to delayed government payments.
Governor Adhikari noted that construction companies had struggled with contract awards and were blacklisted after their checks bounced due to non-payment.
To mitigate these issues, the NRB has extended the deadline for repayment of principal and interest on loans to construction entrepreneurs until December 15, 2024.
Moreover, contractors will not be blacklisted solely based on check bounces until further notice.
The policy also includes provisions for loan classification and maintenance of loan losses as other loans for the current fiscal year.
Governor Adhikari emphasized that the monetary policy is designed to be flexible and balanced, aiming to prevent disruptions to the overall economic and financial system.
He cautioned that relying solely on the monetary policy to address economic slowdowns could pose risks.
He called for coordinated efforts among various entities and policies to stabilize interest rates and create a conducive environment for investment.
Comment