NCC demands for interest rate cut

By A Staff Reporter,Kathmandu, Feb. 3: Nepal Chamber of Commerce (NCC) has suggested maintaining a single digit interest rate to achieve double digit economic growth.

While providing a 9-point suggestion to Nepal Rastra Bank for mid-term review of the monetary policy, NCC demanded a single digit interest rate to review the industries and boost the country’s economic activities.

Similarly, the NCC has also requested the NRB to extend the deadline till mid-July for borrowers who cannot pay the principal and interest in mid-January.

The NCC said that the principal and interest should be readjusted by the end of the current fiscal year.

The Chamber said that most of the borrowers are in trouble as business activities are often halted due to high interest rates along with the liquidity crisis that occurred earlier.

According to the NCC, financial stability will be maintained if the principal and interest rates can be revised through monetary review.

Similarly, in relation to working capital loans, the Chamber has also demanded that both small and large businessmen should be able to use up to 40 per cent on an equal basis according to the needs of the industry and business sector.

The NCC has also requested to maintain a maximum of 2 per cent in the premium charged by the financial institutions at the base rate.

In the suggestion given by the Chamber to the NRB, it is said that the premium charged on the base rate currently ranges from 0.5 per cent to 6 per cent. The unequal system should be removed and the premium maintained at the base rate only up to a maximum of 2 per cent.

It has also suggested that an attractive package should be brought to create an environment where remittances come only through banking channels.

The Chamber has suggested that the analysis related to the assessment of import and export goods should be removed from the scope of the banking sector and the economy should be made operational by adopting a special policy to bring the capital in the informal economy into the banking system.