Government comes up with various loan subsidies, waiver offers
KATHMANDU, July 13:
To overcome rising unemployment problem and stop migration of youth to overseas job destinations, the government has unveiled programs to engage them in agricultural sector by offering them cheaper loans.
In the budget for fiscal year 2014/15 unveiled on Sunday, the government said it offer loans at a maximum of 6 percent from commercial banks. The government has said it would finance four percent interest rate of such loans. The government has allocated Rs 1 billion for the purpose.
Apart from this, the government has allocated Rs 1 billion to the Sana Kisan Bikash Bank to invest on increasing meat production.
Those who want to start large-scale commercial farming would also benefit from the budget. “Private groups taking loans for commercialization and mechanization of farming by pooling 10 hectares of land in hills or 20 hectares in Tarai would be provided 50 percent subsidy on interest payment. The subsidy will be 75 percent for small and marginalized farmers’ cooperatives,” reads the budget.
The government has something to offer as a relief for conflict victims as well. Martyr’s families, who have taken loan of up to Rs 1 million from the government-owned banks, will not have to pay any interest and principal of that loan. Similarly, interest, fine and other charges of loan taken by the families of the disappeared will be waived off if the principal amount is paid.
Likewise, individuals, who started business with loan up to Rs 1 million but died or the business was destroyed or shut down during the course of conflict, would be exempted of all interest, fines and charges if 25 percent of interest amount along with principal amount is paid.
5% LOAN PROVISIONING REQUIREMENT FOR CO-OPS
Saving and Credit Cooperatives will now be required to make 5 percent loan provisioning on lending. The government has allocated Rs 50 million to provide grant on seeds and cold storage building for cooperatives. They will also get capital to start their ventures.
BANKING LAWS TO BE AMENDED
The government has said that it would table various laws related to the BFIs like, NRB Act, BAFIA Act and Banking Crime and Offence Act, among other laws, in the budget session of the parliament for approval.
The budget for the new fiscal year, however, has failed to appease the bankers.
“Most of the programs in the budget are not new for the BFIs. We have asked the government to reduce corporate tax to 25 percent from existing 30 percent which could not be addressed,” Bhuvan Dahal, executive member of Nepal Bankers Association, told Republica. “The government has focused on the infrastructure development which is quite positive. But, to make sure that these are implemented, the government should focus on bureaucratic reforms.”
Similarly, the government has said that it would continue existing incentives for BFIs going for the mergers and acquisitions. Encouraged by the merger spree seen in the BFIs, the government has said that the insurance companies should also follow the suit.
The government is also starting a study on establishment of a labor bank keeping in view the rising number of migrant workers, flow of remittances and the social security allowance for the workers. “The study on formation of labor bank on joint investment of employers, laborers and government will start soon,” reads the budget.
The government has reiterated its commitment to induct foreign strategic partners in Nepal Bank Ltd and Agricultural Development Bank Ltd with the objective to promote them as international standard banks.
VOTER ID CARD BASIS FOR SOCIAL SECURITY ALLOWANCE
Social security fund distribution through banking channel would be expanded in every district gradually, according to the government. “Voter ID cards would be made a basis to distribute the social security allowance until the National Identity Cards are introduced,” the budget document states.
Source: Republica
