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Kathmandu, June 11. Banks and financial sector representative organizations have said that in the upcoming monetary policy, the policy should be formulated in a way that does not reduce the confidence of the financial sector.
Sunil KC, president of the Nepal Bankers Association, said the construction sector is facing the most problems right now and monetary policy should support it. He complained that small businesses were supported during the COVID-19 pandemic, but not now. “If we can support it, we can recover quickly through them,” KC said at a pre-monetary policy discussion organized by the Nepal Economic Journalists Association on Tuesday, saying that “banks’ non-performing assets have increased. There are many reasons behind this. The problems of cooperatives are also related to it. We need to improve the way we look at the banking sector and not make it nervous. If the banking sector is in trouble tomorrow, the Nepali economy will be in real trouble that day. Monetary policy should be taken seriously.
Similarly, Federation of Banks and Financial Institutions acting president Rajesh Upadhyay said even where the final investment exceeds what was stipulated yesterday, it should be corrected.
Monetary policy alone is not enough, he suggested that other policies should also be improved. Upadhyay said: “The responsibility of monetary policy is to improve the financial sector without causing a drop in confidence. Let’s not try to reform it all at once, let’s start with gradual improvements.”
He said that although the loans were going to land and stocks, improvements were still needed. “However, reforms cannot be completed all at once, and if we try to do so, the impact will be negative,” he said.
He said that last time banks had ample liquidity but no investment. “It is expected that the policy is thought out,” he said, “and policy instability affects investor confidence. It will also affect the banking industry, so let’s take it seriously.”
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