New monetary policy to raise bank’s capital base, restrict spread rate, encourage merger and acquisition ShareSansar, July 21: Nepal Rastra Bank (NRB) is scheduled to announce the new monetary policy on Sunday at around 1:45 pm at the Conference hall of the Nepal Rastra Bank, Baluwatar. The monetary policy is expected to center around issues like increasing the capital base of commercial and development banks, merger and acquisition policies, microfinance lending, banking spread rate, and measures to control inflation. The central bank had already intimated the banks about raising capital informally. The monetary policy is expected to require the banks to increase their capital base to Rs 5 arba from the current Rs 2 arba. Likewise, development banks will need to have a capital base of Rs 200 crore from the current Rs 70 crore. While the policy is likely to give continuity to the merger facilities to encourage merger between banks and finance institutions, an NRB source said additional incentives for BFIs entering merger is unlikely. The monetary policy is also expected to address the request of large banks who have been calling for more clear and flexible provisions on acquisition. Other areas to be covered by the policy are measures to increasing lending, reduce bank spread rate and increase refinancing in the productive sector. The new monetary policy will encourage microfinance lending by nudging BFIs to go to rural areas through change in branch opening requirements. The NRBs is expected to step up pressure on banks to keep the interest rate at a certain level. The move will benefit customers and investors as it is aimed at warding off risks that arise due to volatility in interest rates.
Posted on: Sun, 21 Jul 2013 15:52:54 +0000
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