Tightening supervision, monetary policy becoming flexible on many issues
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Governor of Nepal Rastra Bank Vishwanath Poudel is announcing the monetary policy for the coming financial year today. After preparing the draft of the monetary policy, the governor held a meeting of the management committee on Thursday afternoon and discussed the policy.
On the same day, in the evening, he had a discussion with Deputy Prime Minister and Finance Minister Bishnu Paudel. After that, on Thursday evening, he called a preparatory meeting of the board of directors. Sources said that many things were finalized in that meeting. After that, a meeting is being held in the Rashtra Bank Board of Directors now (from 8 am) to finalize the monetary policy. Sources said that after the meeting is over, the monetary policy is planned to be announced this afternoon (one, two o'clock).
In the previous years, the monetary policy was usually introduced from the first week of July, this year the new governor Paudel is going to bring his first policy within June. Since the financial policy (budget) will be implemented from July 1, the monetary policy is also being tried to be implemented from the same date.
There is a possibility that Governor Paudel will become very liberal in the new monetary policy. Even though there is sufficient liquidity in the financial system and the lowest interest rate since four years, loans have not been provided as expected. Economic activity has not become sustainable. The ability of borrowers to repay their loans is decreasing. Bad loans of banks and financial institutions are also increasing due to borrowers not being able to pay principal and interest on time. In such a situation, the Rashtra Bank is ready to relax the monetary policy so as to provide relief to both the borrowers and the banks and financial institutions.
Sources said that the establishment of an asset management company for the management of increasing bad loans, flexible arrangements for blacklisting, facilities for small borrowers, flexible guidance regarding working capital loans, modification of the existing arrangement regarding the classification of loans, etc., will be done in monetary policy.
Lately there has been a lot of discussion about the new license of banks and financial institutions, but there is a lot of discussion going on in the board of directors. Therefore, sources claim that even if the licenses of specialized banks including Neo Bank are distributed, it is unlikely that all the licenses will be opened immediately.
