Businessmen stress restraint on interest rate hike by BFIs

BY OUR CORRESPONDENT

Dhangadhi, Nov. 9: Kailali Chamber of Commerce and Industry on Tuesday has submitted a memorandum to Prime Minister Sher Bahadur Deuba at his private residence in Dhangadhi, demanding to reduce the high interest rates charged by banks and financial institutions.

The Chamber said that the private sector was victimized by the sudden increase in the interest rates on loans by banks and financial institutions in the country. The memorandum states that the private sector has reached a state of collapse due to the sharp rise in interest rates on loans.

Pushpa Raj Kunwar, chairman of the Chamber, said that due to the sharp increase in interest rate, industrialists and businessmen had been unable to pay the interest and principal installments. He said that the private sector had become a victim of repeated interest rate hikes by banks and financial institutions, and installment payments in uncomfortable situations.

The Chamber said that the banks and financial institutions had suddenly increased interest rates after Nepal Rastra Bank issued the 'Operating Capital Directive 2079'. It is said that although Nepal Rastra Bank instructed not to increase the premium based on the base rate, banks and financial institutions had not complied with it. The Chamber has also made various demands pointing out that the current registration guidelines should be improved.

The Chamber has demanded that the investment capital should be managed by increasing the interest rate and deposit interest rate by one digit for industry and half a per cent for trade.

Similarly, a request had been made to reduce the expenses of the banks and make arrangements to keep the spread rate within 3 per cent and only 2 per cent additional premium could be charged based on the risk. It demanded that the banks put an end to double hike in service fee, loan approval fee, LC negotiation fee and not charge more than last year.

Similarly, the Chamber has demanded that special programmes be arranged to boost the economy which has been buckled due to COVID and that tourism should be declared as a priority sector and loans should be provided to that sector.