The Nepal Chamber of Commerce (NCC) has submitted a series of recommendations to Nepal Rastra Bank (NRB), urging the central bank to formulate an investment-friendly, production-oriented, and private sector-supportive monetary policy for the upcoming fiscal year.
A delegation led by NCC President Kamlesh Kumar Agrawal met NRB Governor Dr. Bishwo Nath Poudel on Thursday and requested policies aimed at expanding economic activities and creating a more conducive business environment.
Key Recommendations by the Chamber
1. Increase Credit Expansion
The chamber suggested that bank lending should grow by more than 20 percent to help achieve the government’s target of 7 percent economic growth.
It noted that industries, trade, construction, tourism, and service sectors have remained sluggish for the past five years, weakening private sector confidence and necessitating economic revival measures.
2. Maintain Single-Digit Interest Rates
The NCC called for:
- A permanent policy of single-digit interest rates.
- Maintaining the bank rate at 5 percent.
- Limiting the interest spread rate to 3.5 percent.
3. Reform Working Capital Loan Policy
The chamber demanded the repeal of the Working Capital Loan Guideline 2021, arguing that businesses should have easier access to working capital financing.
4. Simplify Anti-Money Laundering and KYC Procedures
The NCC recommended:
- Making anti-money laundering regulations more practical.
- Adopting a realistic approach regarding the source of assets acquired before 2007 (2064 B.S.).
- Introducing an integrated digital Know Your Customer (KYC) system so that customers who complete KYC at one bank would not have to repeat the process at other banks.
5. Support Distressed Borrowers
Instead of immediately blacklisting borrowers who fail to pay loan installments or interest on time, the chamber proposed:
- Loan rescheduling.
- Loan restructuring facilities for struggling businesses.
6. Revive Housing and Real Estate Sector
To stimulate the housing and property market, the NCC suggested maintaining the Loan-to-Value (LTV) ratio at 80 percent.
7. Improve Banking and Financial Services
The chamber also requested:
- Regulation of banking service charges.
- An end to unnecessary restrictions on cash transactions.
- An increase in the cash deposit limit.
- Measures to bring capital circulating in the informal economy into the formal banking system.
8. Promote Investment and Priority Sectors
Additional recommendations included:
- Creating a favorable environment for foreign investment.
- Strengthening export promotion measures.
- Providing up to 80 percent financing for electric vehicles (EVs).
- Expanding access to finance for tourism, agriculture, and productive industries.
Governor’s Response
Responding to the delegation, Governor Dr. Bishwo Nath Poudel stated that NRB remains committed to supporting economic growth, expanding investment, and promoting private sector development.
He assured the chamber that legitimate suggestions from the private sector would be considered while formulating the upcoming monetary policy and that policy reforms aimed at creating a business-friendly environment would continue.
Why It Matters
The recommendations come at a time when Nepal is facing:
- Slow credit growth,
- Weak private investment,
- Excess liquidity in banks,
- Low capital expenditure,
- Sluggish industrial activity.
If some of these proposals are incorporated into the upcoming monetary policy, they could help boost business confidence, encourage investment, stimulate credit demand, and support broader economic recovery.
