CIM holds interaction on Working Capital Loans Guidelines, 2079 issued by NRB

KATHMANDU: Chamber of Industries, Morang held an interaction on Working Capital Loans Guidelines, 2079 issued by the Nepal Rastra Bank (NRB). The guidelines related to working capital loans flowing through banks and financial institutions (BFIs) will come into effect from October 18, 2022. On the occasion, CIM President Suyash Pyakurel opined that while it is relevant for the Nepal Rastra Bank to closely monitor the issues of loan utilisation and take action against those involved in capital flight, in the case of the productive sector, there should be a provision that the operation of the productive industry should not be hindered by the limit put on working capital loans. He said that if the working capital loan limit is set for the industries that buy and store the raw materials needed for the whole year once a year, with the implementation of the guidelines, there could be difficulty in the operation of such industries and businesses and may have to shut down the industries. On part of the industries, the working capital remains on hold for six months owing to production, storage, sales and return, he added. Further, the CIM President said due to the increase in the cost of raw materials, fuel, and interest rates in the international market, there is also an increase in the logistics expenses of the industry, and it is difficult to establish unity in determining the limits between the estimated financial statement and the actual requirement of the working capital, the implementation of the guidelines would create difficulty in the operation of industries. Speaking at the interaction, Meena Pandey, Director at NRB Provincial Office, Biratnagar, pointed out the need to back up the policy made public and clarified that the current guidelines will not create any kind of inconvenience. She said it is natural to feel fear of the change in policy, and asserted that the guidelines issued by the central bank would benefit all sectors by making long-term loan flow easy and transparent. Nepal Bankers' Association Province 1 President Vivek Niraula said the provisions that the licensed organisation can maintain the total working capital loan limit up to  maximum of 40% of the estimated annual turnover/sales by mentioning those reasons in the loan file after analysing an enterprise business, and that it can approve up to maximum of 25% of the annual turnover/sales will have a positive effect in the long term and there was no need for industrialists/businesspersons to panic. Former president of CIM Shivashankar Agrawal, Province 1 Executive Committee Head of the Association of Chartered Accountants of Nepal (ACAN) Manoj Adhikari, CIM Vice President duo Raj Kumar Golcha (Financial Sector) and Nanda Kishor Rathi (Energy Sector), CIM Executive Board members Sanjay Agrawal, Taranath Niraula, Sudip Ghimire, industrialists, businesspersons and representatives of Nepal Bankers'Association and ACAN were present in the interaction programme. READ ALSO:

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