Confederation of Nepalese Industries Reacts Positively to Monetary Policy
24 Ashad, Kathmandu – The Confederation of Nepalese Industries (CNI) has expressed a positive and balanced appraisal of the monetary policy for the fiscal year 2083/84 released by Nepal Rastra Bank on Tuesday. The policy is expected to boost morale within the private sector amid gradual improvements in the country’s economy. According to the CNI, the monetary policy strives to balance price stability, financial system stability, and high economic growth.
The Confederation welcomes the policy’s acknowledgement of the decisive role of the private sector in achieving the government’s target of 7 percent economic growth. CNI President Anjan Shrestha emphasized that the policy adopts flexible and appropriate measures to encourage private sector investment expansion, increased production, job creation, and more dynamic economic activities. “The policy integrates various issues that the Confederation has long advocated,” Shrestha stated. “Provisions to eliminate unlimited liabilities created through personal guarantees, management of non-performing loans in sick industries, and measures for the revival of stressed loans are positive steps.”
Further, the policy’s approach to determining share collateral loan limits based on institutional capacity and facilitating credit-to-collateral ratios for large electric vehicles used in public transport are also seen favorably. However, the Confederation stressed the need for clear inclusion of restructuring and rescheduling of loans for small, medium, and large industries across various sectors in upcoming directives.
The decision to maintain the policy rate, fixed deposit rates, bank rates, cash reserve ratio, statutory liquidity ratio, and standing liquidity facility is viewed as essential for sustaining monetary stability. Such stability is expected to increase investor confidence and create a more predictable business environment.
The Confederation also welcomes policies aimed at advancing digitalization in banks and financial institutions, reducing financial costs, improving service quality, and making regulatory frameworks simpler, clearer, and more effective. Simplifying banking regulations and facilitating foreign exchange processes are anticipated to ease trade, investment, and international transactions.
President Shrestha clarified that the success of the monetary policy hinges on its effective implementation. “To achieve the 11 percent credit flow target and efficiently utilize adequate liquidity in the banking system, accessible and affordable financing must reach industries, agriculture, tourism, energy, information technology, infrastructure, export-oriented industries, and small and medium enterprises,” he said. “Without credit expansion in truly productive sectors, economic revitalization cannot gain momentum.”
The Confederation underlined the importance of parallel progress in the government’s economic reform programs, investment-friendly legal reforms, effective implementation of capital expenditure, and project pace alongside the monetary policy. It emphasized that effective coordination between monetary and financial policies is vital for achieving desired economic transformation.
The CNI reaffirmed its commitment to collaborate continuously and constructively with Nepal Rastra Bank and the government to enhance the private sector’s competitiveness, expand investment, and promote sustainable economic growth. The Confederation also highlighted that sustained dialogue between public and private sectors and policy stability will accelerate economic momentum.
Meanwhile, the Confederation urged serious consideration of private sector demands to introduce flexibility in loan classification and loss provisioning. It suggested softening watch list and blacklisting criteria for two years and advancing Financial Sector Reform 2.0. The private sector stressed the urgent need to implement the second generation financial reform program encompassing banking recapitalization, management of non-performing assets, expansion of risk-sharing mechanisms, and development of financial instruments targeted at productive sectors.