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काठमाडौंमा वायुको गुणस्तर: ६५

Third review of monetary policy brings relief to auto and real estate sectors

The loan repayment income ratio for purchasing real estate will be simplified from the existing 50 percent to 70 percent on the basis of tax payment proof submission.
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The Nepal Rastra Bank has announced the third quarter of the monetary policy of the current financial year to provide relief to the real estate, auto market and stock market. In order to make these sectors viable, the government had already done the real estate auction, and the National Bank had eased the policy through the second quarterly review. Even with those arrangements, when these sectors are unable to operate, the National Bank has made policy arrangements for further tolerance through the third quarter arrangement.

Third review of monetary policy brings relief to auto and real estate sectors

Prakash Kumar Shrestha, head of research department of Rashtra Bank, said that the new arrangement will make real estate, auto market and stock market more efficient. "These arrangements will definitely help in the process of running the economy," he said. Although the Rastra Bank through the review, those A circular (instruction) should be issued for the implementation of the

system.

According to the new arrangement, now banks and financial institutions will be able to arrange only 1.20 percent loss on immovable loans. Earlier, there was a provision for 1.25 percent loss in such loans. "The existing loan loss provision for loans classified as good from banks and financial institutions will be reduced from 1.25 percent to 1.20 percent," said the review of monetary policy. Manoj Gyawali, Deputy Chief Executive Officer of Nabil Bank said that this arrangement will have a positive impact on the profitability of banks and financial institutions. "The credit of the good category of banking is around 47 trillion, looking at this way, it seems that the loan loss arrangement will decrease by 2 trillion 3 billion." There will be a positive impact on profits," he says.

According to the Rastra Bank, the loan payment income ratio for real estate purchase purposes will be simplified from the existing 50 percent to 70 percent based on the submission of proof of tax payment. Currently, there is a provision that borrowers can take loans up to 50 percent of the taxable income submitted to the bank in monthly installments. By modifying that arrangement, the National Bank has made a provision to take a loan up to 70 percent of the taxable income in monthly installments. Through this arrangement, home loans have been made easier. This seems to make the real estate business a little easier to run. Currently, loans of up to 20 million are seen at 384 billion and 248 billion in other real estate," Gyawali said.

Banks and financial institutions will now be allowed to sell 20 percent of their primary capital shares in a financial year. "Banks and financial institutions will be allowed to sell up to 20 percent of their primary capital in one financial year from investments that have passed the 1-year period," said the National Bank. Previously, there was a provision to sell shares up to 1 percent of their primary capital in a financial year.

Rashtra Bank claims that the new arrangement has been made based on the conclusion that the stock market is not viable because banks and financial institutions cannot sell shares. However, Gyawali claims that this arrangement will not have a positive impact on the stock market. "Not changing the system of buying shares, but only selling them will increase the supply in the stock market. Banks get an opportunity to exit the investment. But it doesn't seem to have a positive effect on the stock market,' he added, 'but according to the current arrangement, the provision of selling up to 1 percent of the primary capital in one financial year is being made to give a positive message.' The risk weight of all hire purchase (auto) loans will be fixed at Rs. The National Bank has reduced the risk burden of hire purchase vehicle loans, which have a 125 percent risk burden in loans of more than 2.5 million rupees provided by banks and financial institutions, to 100 percent. Experts claim that economic activity will continue as auto loans will increase with this system.


'With this arrangement, now when the risk burden is 100 percent in all such loans, banks will easily provide hire purchase vehicle loans and the risk burden will decrease. This will give some relief to automobile businessmen,' says Gyawali, 'There will be general relief in the capital fund of banks. Out of the 1 trillion 27 billion hire purchase loans of banks, the risk weight of 2.5 million loans will be reduced. Through the review, the risk weight of the hire purchase vehicle loans, which are 125 percent of the existing risk weight provided by banks and financial institutions, has been reduced to 100 percent.

The Rastra Bank has also announced that it will facilitate the use of additional tools to strengthen the capital of banks and financial institutions. Gyawali said that when there is pressure on the capital fund of banks and financial institutions and there is a negative impact on the reserve fund, there is a possibility that there will be an arrangement to allow perpetual preference shares to manage the capital fund. He said that this will make capital management easier for banks to increase their business and will give relief to banks in capital management.

प्रकाशित : जेष्ठ ५, २०८१ ०६:२८
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