October 21: Industrialists of eastern Nepal have started protests against excessive hike in interest rate and accused the central bank of favouring banks and financial institutions even when the production capacity of industries have dropped to 40 percent. They said that the Nepal Rastra Bank has been giving undue favour to the banks by ensuring that their profit does not shrink even at the expense of production cuts.

Speaking at an interaction organized by Province 1 chapter of the Federation of Nepalese Chamber of Commerce and Industry (FNCCI) on Thursday, stakeholders expressed concern over the policy adopted by the central bank that ensures banks run in profit at any cost. They also complained about forceful extortion in the name of donations ahead of the elections. All these have led to a situation in which industries have been forced to limit their production to 40 percent of their total capacity, according to the stakeholders.

Industrialist Tika Raj Dhakal shared that the political parties, leaders and activists have been seeking donations even though the industrialists have been requesting them not to ask for donations to the industries that are not in operation.

Dhakal said that they opted for street protests after the leaders of political parties turned a deaf ear to their problems.

Speaking at the programme, other stakeholders including Bhim Poudel, Rajendra Raut and Suyash Raj Pyakurel were unanimous in saying that the policy adopted by Nepal Rastra Bank has badly affected the industrial sector.

Participants of the programme said that it has become difficult to operate industries and businesses due to the Covid-19 pandemic followed by the Russia-Ukraine war which resulted in rise in prices of petroleum products and disruption of supply chain. In addition to that, liquidity crisis in the banking system, decline in credit flow and increase in interest rates have all created additional burden to the business community.

The Province 1 chapter of FNCCI has announced a three-phase protest programme based on suggestions from the district and municipal associations of FNCCI. Participants of the programme have also decided to submit a 17- point memo to Nepal Rastra Bank demanding the central bank to amend its decision in relation to hike in interest rates.