Kathmandu. KATHMANDU: The Confederation of Bank and Financial Institutions Nepal (CBFIN) has welcomed the monetary policy for the fiscal year 2083/84 as it indicated that it would provide relief to the banking sector and give confidence to the private sector. “The monetary policy is prudent and positive,” Cibfin said.
The monetary policy has adopted monetary policy with a balanced approach towards price stability, stability of financial sector, regulatory easing and overall economic balance. According to Cibfin, the monetary policy incorporates a variety of policy provisions that send a positive message to the financial system and the private sector, changing the traditional pattern of the past.
Likewise, to manage the non-performing loans in the sick industry and to revive the stressed loans, to maintain the policy rate, fixed deposit facility rate, bank rate, cash reserve ratio, statutory liquidity ratio and permanent liquidity facility to help make the business environment more predictable and to maintain policy stability, as well as to make the process of opening or closing bank branches flexible. CBFIN has taken policy measures such as digitalization of financial services, incentivizing banks to cut operating costs, facilitating liquidity flow management through foreign currency purchases, encouraging commercial banks to invest in foreign government bonds, and sterilized interventions in foreign currency purchases.
Although the important recommendations presented by CIFIN in the monetary policy formulation on risk-based credit loss provision, loss management on the basis of total risk in secured loans, some regulatory facilitation related to capital fund adequacy and prudential regulatory reforms in line with international practice have not been addressed at present. The Nepal Rastra Bank is hopeful that the recommendations of the CBFIN, which will contribute to achieving the expansion goals, will be addressed as soon as practicable through the upcoming integrated directive.
“We remain committed to continuous constructive dialogue, collaboration and suggestions with the NRB and the government of Nepal to sustain financial stability, make the banking system stronger, more competitive and efficient, accelerate the recovery of the private sector and mobilize the overall economy through the effective implementation of the provisions of the ongoing monetary policy,” the statement said.
