Lawmakers call to implement 2072-73 monetary policy

Kathmandu, Sept. 3:

Lawmakers have stressed on the need to implement a provision to increase the paid-up capital as per the monetary policy of the current fiscal year 2072-73 recently enforced by the Nepal Rastra Bank.


Speaking in the meeting of the Finance Committee of the Legislature-Parliament today, the lawmakers said that the policy was aimed at maintaining financial ownership.


Lawmakers and concerned authorities including Finance Minister Ram Sharan Mahat said that there should not be any intervention in the autonomy of the central bank.


Speaking in the meeting, Prakash Jwala, president of the finance committee, has asked the Finance Minister, the Governor and Nepal Bankers' Associations to hold discussions on wide-range of questions raised in the meeting, saying that the policy of the Rastra Bank to increase capital fund would have negative effects on the banking sector.


Most of the participants viewed that the policy to increase paid-up capital is the best to strengthen banks and financial institutions. They also stressed the need to provide financial service, focusing on the operation of banks and financial institutions instead of only expanding its numbers.


Minister Mahat was of the view that there should not be any intervention in an international practice for the Nepal Rastra Bank to bring monetary policy and for the Finance Ministry to bring financial policy. He also underscored the need for the Rastra Bank to work freely.


The previous monetary policy had provision to increase minimum paid up capital to promote financial stability and mobilise resources needed for sustainable development by strengthening capital basis of the banks and financial institutions.


The Nepal Rastra Bank had provision that the Banijya Bank should increase its capital to Rs 8 billion till the Nepali month of Asadh of 2074 BS and national-level development banks Rs 2.5 billion. Likewise, the development banks working in four to 10 districts should increase its capital to Rs 1.2 billion till the same period and the development banks working in one to three district Rs 500 million.


Similarly, national-level financial institutions with four to 10 districts as its working areas should increase its capital to Rs 800 million till the same period and the financial institution working in one to three districts Rs 400 million.


Acting Governor Gopal Kafle said that they could not go back with the monetary policy as the provision has been brought through rigorous studies by the Rastra Bank.


"We are committed to the monetary police, which is or was needed for financial stability," he said. He also expressed his view on showing flexibility on the deadline allocated to increase capital fund.


Saying that they are not against the monetary policy of the Rastra Bank, Upendra Poudel, Chairman of the Nepal Bainkers Association, said that they were positive on the development of the banking system.

Source: RSS