The private sector has largely welcomed the monetary policy announced by Nepal Rastra Bank for the fiscal year 2082/83, while the automobile industry has expressed disappointment over unmet expectations.
Private Sector Reactions: Generally Positive
Various umbrella organizations from the private sector have issued statements appreciating the monetary policy, stating that it is aimed at revitalizing economic activities.
One of the main highlights welcomed by business groups is the relaxation in the guidelines related to working capital loans, though many have also called for the expansion of its scope.
- Confederation of Nepalese Industries (CNI) said the policy was encouraging: “The revision in working capital loan guidelines based on business nature and payment cycles is a positive step. However, the scope should also include productive sectors and the construction industry.”
- Nepal Chamber of Commerce (NCC) termed the policy as financially facilitative but suggested: “Instead of a mere review, the current working capital loan directive should be revoked in light of current financial conditions.”
- Export-Import Association of Nepal also welcomed the review but emphasized: “The revisions should apply across all types of businesses, not just selected sectors.”
- Confederation of Banks and Financial Institutions Nepal (CBFIN) stated: “The policy offers a clear roadmap for a sustainable and real economy. It considers the country’s current financial condition, expectations of the private sector, and the global economic scenario.”
However, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has yet to issue an official statement on the policy.
Automobile Industry: Frustrated and Ignored
In contrast, automobile dealers and manufacturers expressed deep dissatisfaction, stating that their concerns were completely ignored.
- Nepal Automobile Manufacturers and Importers Association (NADA) and Nepal Automobile Association of Nepal (NAIMA) voiced strong discontent.
NAIMA had requested that the credit-to-value ratio for all types of vehicles be maintained at 80:20, in line with international standards and market demand.
“The absence of any targeted policy for the automobile sector is extremely disappointing,” NAIMA stated.
“Even though the monetary policy intends to improve credit supply, it lacks concrete steps to improve auto loan accessibility, which is crucial for market revival.”
NAIMA had also recommended:
- Allowing LCs in Chinese Yuan for importing Chinese-manufactured vehicles from foreign brands.
- Lowering the risk-weighted assets ratio for auto loans from 100% to 75% to classify them as secure loans.
NADA echoed similar sentiments, stating:
“The policy is far from our expectations. None of the automobile-related suggestions were considered.
Import-related facilitation measures were also completely ignored.”
However, NADA welcomed one aspect:
“We appreciate the proposed regulatory adjustments related to hire purchase companies, particularly on interest rate calculation and service fees.”
