Nepal Rastra Bank-
Maha Prasad Adhikari the governor of Nepal Rastra Bank (NRB) on 13 August unveiled the monetary policy for the fiscal year 2021/22. The major highlight of the policy were the refinancing policies that have been brought in to revive industries, businesses and start-ups which were heavily impacted by the first and second wave of the pandemic. Similarly, the loan-to-capital deposit ratio has been raised from 85 percent to 90 percent; with the current provision on credit resource mobilization ratio scrapped and the provision of the credit to core capital (CCD) ratio renounced while the permissible margin lending percentage has remained the same as the last fiscal. Moreover, to further promote merger and acquisition between commercial banks, new facilities have been added to the pre-existing ones which includes–
- Added one year of lending facilities to predetermined sectors.
- Cash Reserve Ratio (CRR) sliced by 0.5 percent after the commencement of joint venture.
- Statutory Liquidity Ratio (SLR) sliced by 1 percent after the commencement of joint venture.
- Financial Institutions limit on permissible deposit amount to increase by 5 percent.
- Leniency on interest rate spread of 1 percent.
The new monetary policy also focuses on prioritizing investment in agriculture and energy sector, revamping of SMEs affected by the pandemic, special refinancing loans for hospitals and industries importing/producing medical oxygen, medical equipment’s and other essential supplies. Lastly, banks and financial institutions (BFIs) have been barred from charging additional fees and penalties on borrowers and to publish any auction or debt collection notice during a lockdown period and up to a month after the prohibitory measures are lifted.
Tourism and Aviation-
Tourism organizations and associations including Trekking Agencies Association of Nepal (TAAN), Nepal Association of Tour and Travel Agents (NATTA), Hotel Association of Nepal (HAN), Nepal Mountaineering Association (NMA) and so on have called on the government to provide for COVID-19 vaccines to all service providers involved in tourism businesses to further their activities without any risk to their health.
Trade unions have opposed to the proposed legislation to split the Civil Aviation Authority of Nepal (CAAN) into regulatory and service provider. The agitation led by the Democratic Employee’s Union (politically associated with the Nepali Congress) claim that the proposed bill was passed through a ‘back-door’ route and if implemented, the government will privatize airports; scrapping all perks currently enjoyed by trade unions.
Banking and Finance-
Himalayan Bank Limited (HBL) and Diners Club international (a subsidiary of Discover Financial Services) have signed an agreement allowing HBL to become an issuer of Diners Club cards and a merchant acquirer to expand card acceptance for Diners Club International, Discover and Network Alliance cardholders in Nepal. For this, HBL is preparing to expand 146 ATM locations and 5000 points of sale terminals across Nepal allowing Diners Club cardholders from India, South Korea, Turkey and beyond to use their card via HBL when in Nepal.
According to Securities Board of Nepal (SEBON), users of Mero Share has reached 2.8 million in the current fiscal year 2021/22, increasing by 3.5 percent as compared to the previous fiscal 2020/21. Going by numbers, there are currently 880,000 investors active in the share market, with the board contributing around NPR 14.15 billion in revenues as capital gain tax to the government. Considering this commendable feat, the board has decided to give permission to issue IPO equivalent to NPR 108.22 billion for different public companies this fiscal to promote share market capitalization.
Nepal Stock Exchange Ltd (NEPSE) decreased by 24.88 points to later increase by 5.72 points and 0.23 points to reach an index point of 3160.31 points during the first three trading days of this week. A total of 94.77 million shares of 227 companies were traded during the same time period resulting in a turnover of NPR 55.77 billion.
Private Economic Agencies-
The Confederation of Nepalese Industries (CNI) and the UK Aid’s Skills for Employment Program have signed a memorandum of understanding (MoU) for implementing the work place based employment training program in Nepal. The MoU is expected to forward work place based employment-oriented training program with the goal of training skilled human resources for commercial agriculture, production, tourism, information technology, construction and industrial sectors in Province 2 and Lumbini province.