Banks fail to offer refinance facility to productive sector
KATHMANDU:
The productive sector is unable to utilise the refinancing facility provided by Nepal Rastra Bank (NRB) since last year.
“The Monetary Policy last year also mentioned the refinancing facility however export, sick industries and small industries are still paying high interest rates of 16 per cent to 16.5 per cent,” said director general at Federation of Handicraft Association of Nepal (FHAN) Dilip Khanal.
“Though the Monetary Policy for this fiscal year too has brought the refinancing facilities, the industries are nor hopeful of getting it,” he said.
The industries identified as either sick industries or belonging to a productive sector are liable to get refinancing loan at 4.5 per cent and seven per cent respectively, according to the spokesperson at the central bank Bhaskar Mani Gyanwali.
“To get the refinancing loan the industries should themselves approach the bank to claim the facility,” he said, adding that the industries have failed to approach the banks for the loan — according to the central bank’s directives — that is the reason behind not getting the refinancing facility.
“Higher interest rate on the refinancing loan is directly affecting cost of production,” Khanal, said, blaming this fiscal year’s Monetary Policy for being focused on unproductive sector rather than productive sector.
“The commercial banks are not interested in providing the refinancing facility to the productive sector as they get more advantage from the unproductive sectors,” he added.
Nepal Rastra Bank’s decree
The banks and financial institutions’s loan portfolio need to have 20 per cent of industry average lending directed to productive sector, according to Nepal Rastra Bank’s dircetives issued on Thursday. “It includes ag-riculture, energy, tour-ism, cottage and small industries,” it said, adding that banks and financial institutions that are lending more or less than 10 per cent of industry average in productive sector will have to prepare half yearly target for supervision by the central bank. The executive board of the banks and financial institutions needs to regularly review whether the target is being met or not and report to the central bank.
Source: THT
The productive sector is unable to utilise the refinancing facility provided by Nepal Rastra Bank (NRB) since last year.
“The Monetary Policy last year also mentioned the refinancing facility however export, sick industries and small industries are still paying high interest rates of 16 per cent to 16.5 per cent,” said director general at Federation of Handicraft Association of Nepal (FHAN) Dilip Khanal.
“Though the Monetary Policy for this fiscal year too has brought the refinancing facilities, the industries are nor hopeful of getting it,” he said.
The industries identified as either sick industries or belonging to a productive sector are liable to get refinancing loan at 4.5 per cent and seven per cent respectively, according to the spokesperson at the central bank Bhaskar Mani Gyanwali.
“To get the refinancing loan the industries should themselves approach the bank to claim the facility,” he said, adding that the industries have failed to approach the banks for the loan — according to the central bank’s directives — that is the reason behind not getting the refinancing facility.
“Higher interest rate on the refinancing loan is directly affecting cost of production,” Khanal, said, blaming this fiscal year’s Monetary Policy for being focused on unproductive sector rather than productive sector.
“The commercial banks are not interested in providing the refinancing facility to the productive sector as they get more advantage from the unproductive sectors,” he added.
Nepal Rastra Bank’s decree
The banks and financial institutions’s loan portfolio need to have 20 per cent of industry average lending directed to productive sector, according to Nepal Rastra Bank’s dircetives issued on Thursday. “It includes ag-riculture, energy, tour-ism, cottage and small industries,” it said, adding that banks and financial institutions that are lending more or less than 10 per cent of industry average in productive sector will have to prepare half yearly target for supervision by the central bank. The executive board of the banks and financial institutions needs to regularly review whether the target is being met or not and report to the central bank.
Source: THT
