Kathmandu. KATHMANDU: The Confederation of Bank and Financial Institutions (CFIs) Nepal (CBFIN) has welcomed the monetary policy released by Nepal Rastra Bank for the fiscal year 2083/84.

The NRB welcomed the policy even though most of the suggestions given by Sibifin before the monetary policy were not implemented.

The monetary policy unveiled by the NRB has adopted a monetary policy with a balanced approach towards price stability, stability of the financial sector, regulatory simplification and macroeconomic balance.

Cibfin welcomes a change from the traditional structure of the past to include a number of policy provisions that send a positive message to the financial system and the private sector.

The meeting also decided to keep the policy rate, fixed deposit facility rate, bank rate, cash reserve ratio, statutory liquidity ratio and permanent liquidity facility unchanged to manage the bad loans in the sick industry and revive the stressed loans, to help make the business environment more predictable and to maintain policy stability.

Likewise, the process of opening or closing bank branches will be made flexible and financial services will be digitized and banks will be encouraged to cut down on operating costs.

The policy measures such as encouraging commercial banks to invest in foreign government bonds and sterilized interventions for foreign currency purchases have been taken as prudent and positive steps by Cibfin to ease liquidity flow management through foreign currency purchases.

“Some of the key recommendations made by CBFIN in the course of monetary policy formulation on the risk-based credit loss regime, the total risk-based loss regime on secured loans, some regulatory facilitation related to capital fund adequacy and prudential regulatory reforms in line with international practice remain unaddressed,” the statement said.

“Nepal Rastra Bank expects to carry out necessary study and address the recommendations of the CBFIN in a practical manner through upcoming integrated directives regarding the current economic situation of Nepal, the increasing capital pressure on the banking sector, the management of non-performing loans and the financing to the private sector that will contribute significantly to achieving the government’s goal of expanding the economy,” the statement reads.

“Through the effective implementation of ongoing monetary policy provisions, the bank remains committed to maintaining financial stability, making the banking system stronger, more competitive and efficient, accelerating the revitalization of the private sector and revitalizing the economy of Nepal Rastra Bank,” the statement said.