सिंहदरबार संवाददाता
Kathmandu. Governor of Nepal Rastra Bank Mahaprasad Adhikari has reviewed the last monetary policy of his term. Governor Adhikari has made partial changes in the policy to make it easier for banks and financial institutions.
Recently, as the volume of electric vehicle loans started increasing, bankers had demanded an increase in down payment on EVs. As per the demand of bankers, the National Bank has reduced the financing of EVs from 80 percent to 60 percent.
The 20 percent down payment has reached 40 percent, meaning that now those buying electric vehicles will have to pay 40 percent cash upfront. Banks are currently financing close to one trillion rupees on EVs. The National Bank has cut the facility given to electric vehicles after a large loan was invested in EVs.
Point number 40 of the review states, ‘The limit of loan to value ratio for personal vehicles and all types of electric vehicles will be fixed at 60 percent.’
Point number 41 of the review states, ‘The existing loan loss provision of 1.10 percent for good loans will be fixed at 10 percent.’ This provision will now reduce the share of provisions made by banks for bad loans. It will also increase the income of banks. Santosh Koirala, President of the Nepal Bankers Association, said that the review of monetary policy came as per the demand of banks. Chairman Koirala said, “The review has come as demanded by all the banks. In the case of non-deliverable forwards, the limit of 15 percent of the core capital has been increased to 20 percent, which will further broaden the income of the bank. The review has also reduced the provision for bad loans of the bank, which has given room for the bank to increase its income.”
Non-deliverable forwards are a system that allows banks and financial institutions to invest in foreign bonds. Bankers have been demanding an increase in its limit for a long time. It has been arranged that the interest rate of loans of microfinance institutions should be fixed by linking it to the base rate from 2082 Jestha.
Although the recent trend of price increase has pointed out the need to increase the policy rate, the expansion of economic activities should also be given high priority, so the cautious and flexible course of action taken while issuing the monetary policy for the fiscal year 2081/082 has been maintained.
The existing policy rate of the monetary policy has been kept unchanged at 50 percent, the deposit collection rate, which is the lower limit under the interest rate corridor, has been kept unchanged at 30 percent, and the bank rate, which is the upper limit under the interest rate corridor, has been kept unchanged at 6.5 percent. The mandatory cash balance and statutory liquidity ratio have been kept unchanged.
Will be implemented.
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