November 9: Industrialists of eastern Nepal have submitted a memorandum to the government regarding excessive interest rates charged by banks.

As per the schedule of their protest programme announced earlier, the Province 1 chapter of the Federation of Nepalese Chamber of Commerce and Industries along with all other associations affiliated to the FNCCI in the province as well as 14 other associations submitted memorandum to the government officials in their respective district administration offices on Tuesday protesting against the exorbitant interest rates charged by the banks.

The Province 1 chapter of FNCCI submitted memorandum to the DAO Morang as well as the provincial offices of all the 26 commercial banks. Central member of the FNCCI Avinash Bohora handed over the memo to Assistant CDO of Morang Pradeep Shah.  The memorandum signed by Tikaraj Dhakal, president of Province 1 chapter of FNCCI, has also urged the government not to implement the Working Capital Guidelines issued by Nepal Rastra Bank on October 18.

The protesting industrialists argued that the situation at the moment is not favourable to implement the guidelines prepared by the central bank.  The memorandum also mentions that the spread rate of banks should be less than 4.4 percent.

“Whatever may be the impact of current crisis on other businesses, the profit of the banking sector has been expanding. On top of it, the interest on loans has been increased disproportionately compared to the hike  in interest on deposits,” reads the memo.

The memorandum has demanded lower interest rates for loans disbursed to the productive sector and refinancing facility as well.

The private sector insists that the government should have given concessional loans and other facilities to bail out the industries that are still reeling under the impact of Covid-19, but the government is heading in the opposite direction.

The private sector has expressed concerns regarding the policies adopted by the central bank one after another jeopardizing the economy.

Likewise, the industrialists have also urged the concerned authorities not to extend the ban on certain luxury goods for a long time.

“The cash reserve ratio (CRR) has been increased from three percent to four percent. This has further deepened the liquidity crisis. The cash reserve ration should be maintained at the previous level for an interim period. It will ease the liquidity crisis to some extent,” states the memo.

The FNCCI has also urged the government to immediately go for the country rating as per the policy adopted by the government. It further suggested policy improvement to bring more investment to the country.