NRB Spokesperson Poudel: Monetary Policy to Support Budget

Kathmandu. Nepal Rastra Bank's Executive Director and Spokesperson Gurupasad Poudel has stated that the monetary policy will be brought in a way that supports the budget introduced by the government. Poudel said this while addressing the 'Decoding Modern Banking for Economic Journalists' program organized by the Nepal Economic Journalists Association in collaboration with Nabil Bank on Sunday.

"The monetary policy of Nepal Rastra Bank has to be formulated in a way that supports the budget brought by a government that has received unprecedented public trust and mandate, and the direction that budget seeks to provide. We are working on its homework," he said.

He expressed optimism that an asset management company will be established for the non-banking asset management of banks and financial institutions. He said that he is optimistic that the asset management company will come this year as the government has set a deadline to move forward with it. "The issue of asset management company has been raised by the Government of Nepal and Nepal Rastra Bank since 2057-58 BS," he said, "The current government has also raised it. Therefore, we are optimistic that it will take a concrete shape."

According to Spokesperson Poudel, the interest rate in the financial system is currently very low and there is sufficient liquidity in the banks. "To manage liquidity, Nepal Rastra Bank is spending billions of rupees to maintain the interest rate within a certain limit," he said.

He stated that banks and financial institutions also have the capacity to disburse loans comparatively. He said that even though the banking sector has the capacity to lend, credit expansion is not happening.

He said, "But why is the loan not going? The government is trying to carry out capital development construction works. The private sector is trying to come forward. We need to see how to overcome such a situation."

He said that the Rastra Bank has recently focused on providing loans to small sectors. He said that arrangements have been made for banks and financial institutions to disburse loans up to ten lakhs in small sectors after their own evaluation.

"We are also trying to move forward with the system where loans can be disbursed without this document through P2P lending," he said.