CBFIN suggests NRB to maintain a loan-to-deposit ratio at 95 percent

Desk by Muna

The Confederation of Banks and Financial Institutions Nepal (CBFIN) has suggested the NRB to maintain the loan-to-deposit ratio (CD ratio) at 95 percent.

Speaking at a press conference in Kathmandu on Thursday about the monetary policy suggestions for the coming fiscal year, the confederation said that the existing CD ratio should be maintained at 95 percent and necessary policy arrangements should be made to expand investment in the productive sector. Similarly, the confederation has suggested that the right to deduct the distribution of profits earned by banks and financial institutions should be given to the concerned institutions in accordance with the law.

The confederation has stated that allowing the local body to calculate 100 percent of the deposit will help in the flow of credit to the productive sector.

Confederation President Pawan Golyan said that there should be an arrangement to expand investment in the productive sector to promote exports by giving further continuity to the strictures imposed on the import of unnecessary and luxury items.

He said that the NRB should decide to provide a 4 percent lower interest rate on loans to productive industries than loans to unproductive or less productive sectors. He said that the NRB should pay attention to this as the import could increase if the productive sector is not facilitated in the flow of credit. He said that banks and financial institutions should not only earn money but also contribute to the economic development of the country.

The confederation has also suggested bringing an attractive plan to save a certain portion of remittances by especially managing the remittance inflow. The confederation has also suggested banning the import of agricultural commodities and materials other than much-needed agricultural raw materials, discouraging wasteful spending, discouraging the use of unnecessary goods and services, and encouraging savings.

Source: Himalayan Tele-Voice