Nepal Rastra Bank Deputy Governor Kiran Pandit said the upcoming monetary policy for the new fiscal year must balance high economic growth with financial stability and coordinate closely with the national budget. The policy is intended to support the government's economic growth target of 7%.
The Nepal Bankers Association has submitted 21 suggestions for the policy, including reducing the mandatory deprived-sector lending requirement from 5% to 4% of total loans, reviewing the base rate calculation method, and increasing flexibility in loan loss provisioning.
The broader private sector is advocating for a single-digit interest rate environment, with specific demands for the bank rate to be capped at 5% and the spread rate at 3.5%. However, concerns have been raised that further rate reductions could trigger depositor and capital flight, given that deposit interest rates are already at historical lows.