Monetary policy prioritizes hydropower, agriculture and tourism

Kathmandu: The monetary policy Nepal Rastra Bank (NRB) unveiled Sunday has accorded special priorities to hydropower, agriculture and tourism.
The policy has taken these sectors as the main basis of economic development, and defined them as the sectors receiving special priorities.
The policy has made it mandatory for the commercial banks to float 10 percent of its loan to agriculture and five percent each to hydropower, and tourism and the remaining in other prioritized areas in a year 2017/018.
Certain limit would be fixed to contain the inflation.
The banks and financial institutions would be provided additional benefits if they reached the remote area. If the banks of ‘a’, ‘b’ and ‘c’ categories open their branches in the remote districts, they would be lent Rs 10 million without interest.
Similarly, if the financial institutions of ‘d’ category open their branches in the 22 districts, which have no access to micro finance, they would be lent Rs 4 million free of interest.
The NRB’s new provision has also encouraged the banks and financial institutions to ensure every citizen’s accounts.
Establishment of banks at all levels
The monetary policy has put on top priority the government programme to establish banks and financial institutions in all 744 local units. The government had come up with the programme through the annual budget presented in the parliament for upcoming fiscal year.
The NRB stated that the focus was laid to the sector noting all the state-sponsored services would be available at local level.
Laxative provisions for e-vehicle purchase
The policy has come up with the provision to ease the purchase of electronic vehicles on condition of 20 % down payment of total cost.
This particular provision has eased the process to receive 80 % loan for the purchase of the vehicle.
Tough on taking loan on share as collateral
The policy unveiled today has come up with tough stance on taking loan on the basis of shares as collateral. It has limited the disbursement of loan amount up to 40 per cent of the primary capital from the shares as collateral.
The policy has also put tough stance on flowing loan by keeping shares of a single company as collateral. It has arranged that a client can put only 10 per cent of the share of a company as collateral.
Flow investment on disadvantaged sections
According to the policy, the commercial banks should mandatorily flow investment of 5 % out of their total capital on disadvantaged groups.
The NRB source said the provision was made with the objective to enhance the economic condition of disadvantaged groups and communities.

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