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The industry organization Morang has suggested 18 points for the monetary policy of the fiscal year 2082/83 including credit rescheduling, facilitation of working capital loans, regulation of lending transactions, increase in loan collateral ratio, institutional management of business development services.
The industry has not been able to run at its full capacity due to the lack of functioning of the market, the decrease in internal demand for goods and services, etc. Nandkishore Rathi, president of the organization, said that due to this, the overall business business has shrunk, the borrower's ability to pay has decreased and many loans have been classified as non-performing loans.
He also said that the loan period after selling the produced goods in the market is 60 to 90 days (under normal conditions), but now due to the contraction of the market, the loan period has reached more than 180 days. As this affects the entire production cycle, it is mentioned in the suggestion that the current limit of 40 to 50 percent of working capital should be increased to 70 to 80 percent.
The organization claims that there is no mechanism to regulate the loan transactions and recovery done by private sector industrial businesses. The association is concerned that in such a situation, the industrialists will have to lose everything due to investment risk.
Therefore, after assessing the commercial risk that the lending business may bring in the future, Nepal Rastra Bank has been requested to make a suitable method and recommend to the credit information center to include the defaulters in the blacklist of related industries.
Banks and financial institutions generally provide 50 percent of loans based on collateral. The organization also suggests that this limit should be increased and that asset management companies should be established to give the project that is in the form of bad loans an opportunity to re-operate by giving various options.
