Monetary Policy Opens Door For Banks To Borrow Money

Monetary Policy Opens Door For Banks To Borrow Money

July 25, 2019, 7:43 a.m.

Nepal Rastra Bank has unveiled the Monetary Policy for the fiscal year 2076/77 with major highlights of promotion of investment in productive sectors, control interest rate and encouragement for financial institutions to go for merger.

Unveiling the policy, governor of Nepal Rashtra Bank Chiranjibi Nepal said that the policy has aimed to support the current budget’s target to achieve 8.5 percent growth rate.”

“The Monetary Policy focuses to achieve the target set by the ongoing budget,” said governor Dr.Nepal. He said that the policy also solely focuses to increase the access to finance to achieve higher growth.

He said that the interest rate has managed to increase the investment in productive sector.

In the monetary policy unveiled, Nepal Rastra Bank (NRB) has opened door for banks to borrow money from pension funds and hedge funds too in order to ease the liquidity shortage in the market.

Likewise, it has mandated that all commercial banks need to issue debentures worth 25% of their paid up capital and the entire fund raised through debentures can be used to disburse loans.

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