January 17, 2022, Monday

Recovery package has positive impact on economy: Governor Adhikari

Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari has said the recovery packages adopted in the last fiscal year had positive impact on country’s economy. Addressing an interaction organized by Society of Economic Journalists (SEJON) on ‘Deepening liquidity crunch: problems and solution’ here Monday, Governor Adhikari claimed that the joint efforts of government and NRB resulted in quick recovery of economy which was hit hard by the COVID-19. Even the private sector is encouraged with this, he added.

“Although the recovery package was positive move for economy, it has dented liquidity. In spite of liquidity crunch, there is no worry over loan,” he observed, adding that quick change in government leadership and national politics is also behind the liquidity problem. He shared the information that Rs 351 billion loan was floated so far in the current fiscal year.

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But deposit is comparatively low which resulted in 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 government’s inability to increase capital spending. It has resulted in education and health. He warned that current problem will affect 4.5 million share investors.

Golchha also argued that it was difficult to restore tourism, and small and cottage industries which faced worst effects of COVID-19 pandemic. Similarly, Chairperson of Nepal Bankers’ Association, Bhuwan Dahal, suggested NRB that it paid heed to loan management of banks. According to him, among total 753 local levels, 750 had access to banking facility and remaining three will also get it soon.