We have brought monetary policy to expand credit: Governor Adhikari

He said that since the rules related to capital fund management of banks and financial institutions have been relaxed, loans will increase.

'We have implemented various methods and tools to manage the capital pressure in banks. This will ease the capital pressure on banks and financial institutions', Governor Adhikari said. To make it easier, the loan should increase in the financial market. In the current year, we have set a target of 12 percent loan disbursement.'

Through monetary policy, the growth rate of detailed money supply for the current year is projected to be 12 percent and the growth rate of loans going to the private sector will be 12.5 percent. Likewise, the governor officer said that some provisions have been introduced in the monetary policy to facilitate the construction sector which is in trouble without receiving payment from the government.

'After the problems related to the construction sector and the cooperative sector, its multifaceted effects have been seen. "The builders did not get the money, the check bounced when they didn't get the money, they were blacklisted when the check bounced, the bank account was closed after being blacklisted and they could not do anything after the bank account was closed," he said.

Through monetary policy, the Rastra Bank will extend the interest payment period of loans given to construction companies until the middle of next December, unless there is another arrangement related to credit information, not to include in the blacklist only on the basis of dishonored checks, the limit of credit rating when using banking facilities and off-balance sheet facilities among loans. Provisions have been made to make separate arrangements in relation to the loans created by claiming the surety of builders, classifying the loans as other loans and maintaining the loan loss arrangement for the current year from the date of creation of the loan.

Similarly, although the existing maximum limit of Rs. 200 million for the margin nature of the loan provided by banks and financial institutions for institutional investors has been abolished, the limit of Rs. 150 million for the personal share mortgage loan remains the same, the governor officer clarified. He said that behind removing the limit of institutional share mortgage loans, the aim is to increase loans from banks and financial institutions.

'On the institutional side, removing the Rs 20 crore limit on share mortgage loans is not intended to affect the capital market. We have tried to look only at the loans from the banks", said the Governor's official. He also claims that a flexible monetary policy has come in a balanced manner with caution so as not to cause problems to the overall economic and financial system.

Governor Adhikari held the view that monetary policy measures alone are not enough to end the laxity seen in the existing economy. 'If monetary policy alone tries to address everything, it will cause more risks. Monetary policy will stabilize interest rates in the market and simultaneously create an environment for investment. We have to work in harmony with various agencies and policies', he said.