Kathmandu. Nepal Bankers’ Association (NBA) has suggested to the Nepal Rastra Bank (NRB) for the monetary policy for the upcoming fiscal year.

The association has suggested for the monetary policy for the next fiscal year to improve the base rate and remove the spread rate.

There have been complaints that banks and financial institutions have not been able to determine interest rates independently due to the spread rate of interest between the interest paid while collecting deposits and the interest charged while issuing loans.

Of late, the margin of the banking sector has been declining. One of the reasons for the decline in the bank’s profits is the spread rate. That is why bankers are demanding that this system should be removed. “The current rate differential system is against the open market,” says a banker. ’

Similarly, the Bankers’ Association has demanded that the Rastra Bank should review the calculation method of base rate through the monetary policy of the upcoming fiscal year. The association has demanded 100 percent accounting of operating expenses in the base rate calculation, provision of 0.75 percent return on property, expenditure incurred on issuance of bonds, premium expenses incurred for deposit protection in deposit and debt protection fund.

Similarly, the association has also demanded to amend the provision of provision of 100 percent of the amount of bonds in the monetary policy of the upcoming fiscal year. The association has also suggested revising the policy related to loan classification and provision of loan loss.

At present, banks have to make 1 percent loss in loans classified as good category, 5 percent on loans that exceed 1 to 3 months, 25 percent on loans beyond 3 to 6 months, 50 percent on loans that have exceeded 6 months to 1 year and 100 percent by classifying them as bad loans after one year. Bankers have demanded that the provision be revised.