Morang Industry Association Welcomes Monetary Policy, Flags Gaps in Credit Restructuring and Export Support
Morang Industry Association praised NRB’s timely monetary policy but urged improvements in credit restructuring and support for exports and startups.
Kathmandu, July 14, 2025 — The Morang Industry Association (MIA) has expressed cautious optimism regarding Nepal Rastra Bank’s monetary policy for fiscal year 2082/83, highlighting both its timely release and alignment with the national budget as positive developments. However, the association also flagged several critical shortcomings, especially regarding credit restructuring and support for export-led sectors and startups.
MIA President Nandakishor Rathi stated that in the context of a sluggish economy, the flexibility introduced in real estate and margin lending was a welcome move. Provisions such as expanding housing loan limits, restructuring debt for construction-related firms, and increasing the individual borrower cap on share-backed loans could help revive stagnating sectors.
The association acknowledged the reduction in key policy rates—including the bank rate, deposit collection rate, and repo rate—as beneficial to borrowing. Rathi noted this could stimulate investment and consumption, although NRB must remain vigilant against potential capital flight caused by declining deposit interest rates.
While the policy addresses working capital loans in agriculture and small-scale industries by allowing flexibility based on business cycles, MIA emphasized that actual implementation remains uncertain. The association was critical of the lack of specific provisions for larger industries and said the policy fell short in addressing the root cause of market contraction—repayment inability.
Moreover, MIA welcomed NRB’s intent to review loan classification standards based on global best practices but stressed the urgency of timely execution. They also pushed for immediate legal frameworks to operationalize the Asset Management Company (AMC) model, which had been included in the previous policy but stalled due to lack of enabling legislation.
One notable highlight was the KYC (Know Your Customer) infrastructure upgrade provision, which would allow digital sharing of updated customer data across financial institutions—eliminating redundancy and paperwork. The association urged quick implementation to streamline banking procedures.
Despite some progressive steps, MIA criticized the policy’s silence on long-term structural issues and its lack of dedicated support for startups and export-oriented industries. The frequent shifts between tight and loose policy stances, they argued, have led to confusion in foreign investment sectors and underscored the need for more predictable monetary frameworks.