Recovery package has positive impact on economy: NRB Governor Adhikari

This undated image shows Governor of Nepal Rastra Bank, Maha Prasad Adhikari at his office. Photo courtesy: NRB

KATHMANDU: Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari has said the recovery packages adopted in the last fiscal year had a positive impact on the country’s economy.

Addressing an interaction organised by the Society of Economic Journalists (SEJON) on ‘Deepening liquidity crunch: problems and solution’ on Monday, Governor Adhikari claimed that the joint efforts of government and NRB resulted in quick recovery of the economy which was hit hard by the COVID-19. Even the private sector is encouraged with this, he added.

“Although the recovery package was a positive move for the economy, it has dented liquidity. In spite of liquidity crunch, there is no worry over the loan,” he observed, adding that quick change in government leadership and national politics is also behind the liquidity problem.

He shared the information that a loan of Rs 351 billion was floated so far in the current fiscal year. But the deposit is comparatively low which resulted in a liquidity crunch. He is of the view that banks need to float loans on productive sectors.

On the occasion, Chairperson of the Federation of Nepalese Chamber of Commerce and Industry (FNCCI), Shekhar Golchha, however, said liquidity problem was surfaced due to the government’s inability to increase capital spending. It has resulted in education and health. He warned that the current problem would affect 4.5 million share investors. Golchha also argued that it was difficult to restore tourism and small and cottage industries which faced the worst effects of the COVID-19 pandemic.

Similarly, Chairperson of Nepal Bankers’ Association, Bhuwan Dahal, suggested NRB that it paid heed to the loan management of banks. According to him, among a total of 753 local levels, 750 had access to the banking facility and while the remaining three will get it soon.

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