June 9: After banks and financial institutions (BFIs) began to mount pressure on industrialists and business persons to repay the loans with the ending of the current fiscal year nearing, the Federation of Nepalese Chamber of Commerce and Industries (FNCCI) has demanded to provide extension of principal and interest payment deadline for an indefinite period.
Issuing a press statement, FNCCI requested Nepal Rastra Bank (NRB) to include this provision in the Monetary Policy for the upcoming fiscal year. The apex body of the Nepali private sector has also asked NRB to bring monetary policy before July 15.
FNCCI has argued that the deadline for loan repayment needs to be extended until the full revival of the country’s economy also demanding the central bank to restructure and reschedule the lending model.
FNCCI has claimed that BFIs have been mounting pressure on the businesses to pay the principle and interest before July 15. “But businesses are unable to repay the loan due to the crisis,” reads the statement.
The situation is such that many business persons are on the verge of exiting the business sector and it is responsibility of the government to save the businesses at this time of crisis, according to FNCCI.
NRB had extended the loan repayment of principle and interest amount during the lockdown period till July 15.
The lockdown enforced from March 24 by the government to stop the coronavirus transmission has led to the closure of almost all industries across the country. Even after the easing of the lockdown since mid-June, industries have been working on 40 percent of their capacity due to the lack of workers and inadequate supply of raw materials due to disturbances created by the raging Covid-19 cases in neighbouring India.
Pashupati Murarka, past president of FNCCI said that NRB has to bring monetary policy before July 15 and that the policy must address the concerns of industrialists and business persons.
“Though the lockdown has eased, industries haven’t opened completely,” added Murarka “A few big industries may be able pay principle and interest of bank loans, but most cannot at this moment.” While launching the monetary policy, NRB should be equally sensible towards the challenges of BFI’s and announce relief accordingly, he said.