Nepal Rastra Bank is in the final stages of formulating its monetary policy for fiscal year 2026/27, expected to be released in the last week of Asar. The central bank has stated the policy will aim to align with the government's 7% economic growth target while maintaining overall economic and monetary stability.
Stakeholders have submitted a range of proposals to the NRB. The Nepal Bankers Association has recommended reducing the mandatory deprived-sector lending requirement from 5% to 4% of total loans. The Nepal Chamber of Commerce and the Confederation of Industries are calling for single-digit interest rates, a bank rate cap of 5%, a spread rate of 3.5%, and credit expansion of over 20%. They are also requesting a revision or postponement of the Working Capital Loan Directive.
Deputy Governor Kiran Pandit said the NRB cannot implement policies that compromise financial stability. Analysts note that current low interest rates have not meaningfully boosted loan demand, pointing to structural economic issues. Concerns cited include excessive banking system liquidity, weak lending performance, and growth in non-banking assets linked to loan defaults.