Kathmandu. The recent monetary and regulatory policies announced by the Nepal Rastra Bank (NRB) have created a new ripple in the market. Governor Bishwa Poudel has adopted the path of liberal policies to revive the sluggish economy and to boost the deteriorating morale of the private sector. <\/p>\n
The governor’s generous move is seen not only as a technological improvement but also as a strategic oxygen to support the powerful government’s economic goals. Experts are confident that this will please the private sector. <\/p>\n
However, there are some serious questions hidden within this flexibility shown by the NRB, which may pose a challenge to financial stability in the future. <\/p>\n
The most clever aspect adopted by the central bank this time is its time choice. In order to provide relief to the banks which are under pressure till the end of July, the interest collected till July 29 has been given the facility to account for the income of June. This decision will bring an immediate shine to the financial statements of the banks. <\/p>\n
Similarly, the provision of loan restructuring and rescheduling in the case of contractors has raised serious doubts. The facility of loan renewal by paying only 10 percent interest by giving a long time till September 2083 will not allow the ratio of bad loans of the banks to increase in the short term. But instead of solving the real problem, it has only done a great job of deferring the problem to the future. <\/p>\n
The Rastra Bank, which has been providing similar concessions since the past, has been trying to satisfy the private sector this time too, but the real health of the financial system has been overshadowed. Bankers say this increases the risk of promoting evergreening. However, many believe that this is a compulsive situation on the part of the governor. <\/p>\n
The policy on the stock market and vehicle loans, however, has raised hopes that new capital will be mobilized in the market. The government is aiming to increase investment in productive and environment-friendly sectors with the provision of up to 80 percent loan on the collateral of strong companies and the same limit on public electric vehicles. The central bank has made the historical profits, dividends and financial discipline of companies the main basis by allowing an additional 10 percentage points in the valuation based on the 180-day average price. This will not only increase the demand for healthy and strong companies in the market but will also encourage investors to invest on the basis of quality of the company. <\/p>\n
Despite this, monetary policy alone cannot cure all the ills of the economy. There is more liquidity in the banking system now but there is a lack of confidence to invest. Bankers say that the government should play a role in creating an environment conducive for investment, no matter what the monetary policy is. <\/p>\n
To create demand for credit, it is imperative to win the trust of the private sector. The ongoing dialogue with the private sector under the leadership of Prime Minister Balendra Shah (Balen) and efforts to create an environment of trust has given some positive signs. But the results are yet to come. <\/p>\n
At present, the Rastra Bank has shown flexibility and made an easy path, but how fast investors run on this path will depend on the overall policy stability of the state. <\/p>\n
Now the government has made its policies clear through the budget and monetary policy. Bankers are confident that this will give gradual results in the next few months. Since the formation of the new government, there have been some positive signs in loan recovery. “There is a kind of atmosphere,” said a banker, “We have found positivity and improvement in the field.” \u2019<\/p>\n
Bankers believe that loan recovery will also improve in the coming days. This will bring a new atmosphere to the economy.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. The recent monetary and regulatory policies announced by the Nepal Rastra Bank (NRB) have created a new ripple in the market. Governor Bishwa Poudel has adopted the path of liberal policies to revive the sluggish economy and to boost the deteriorating morale of the private sector. The governor’s generous move is seen not only […]<\/p>\n","protected":false},"author":16,"featured_media":229318,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45117,45031,45159],"tags":[],"class_list":["post-307535","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bank-finance-en","category-banner-news-en","category-news-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/307535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=307535"}],"version-history":[{"count":1,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/307535\/revisions"}],"predecessor-version":[{"id":307536,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/307535\/revisions\/307536"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/229318"}],"wp:attachment":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=307535"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=307535"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=307535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}