February 9: Confederation of Nepalese Industries (CNI) has slammed banking sector for inappropriately increasing loan interest rates affecting the trade and commerce of the country negatively. The confederation objected the loan interest raise by the banks in the name liquidity crunch which is increasing difficulty to business community.

Issuing a press statement, CNI said "The banks have started sending interest increment notices to industries despite of previously made agreement. If interest rates for old loans are increased, investment environment will be hampered resulting closure of businesses as well." The banks are providing 12 percent interest rate in short-term deposits as well. As the part of more interest provided deposit is low, the cost is also low. However, the banks are increasing interest rate of all types of loans. CNI opined that the BFIs should not be overcharging the interest rate exceeding the limit of spread rate  set by NRB.

According to the confederation, the step will hamper big industrial projects requiring huge capital and contract employment opportunities resulting low gross domestic product.  The CNI demands appropriate move from government, NRB and other stakeholders to overcome the condition.