Monetary Policy of Fiscal Year 2078/79

Monetary Policy

Nepal Rastra Bank has made public the monetary policy for the current Fiscal Year 2077/78. While reviewing the monetary policy for the Fiscal Year 2077/78, Governor Shri Maha Prasad Adhikari has made public the policy regarding the economic and monetary targets for the Fiscal Year 2078/79.

According to the monetary policy, a person or entity can take a loan from a financial institution up to a maximum of Rs. 40 million and from the overall financial system up to a maximum of Rs. 120 million. If the borrower is consuming more loans than the said limit, an appropriate time limit will be provided to regularize such a loan.

Similarly, the policy and arrangement of credit to core capital plus deposit ratio (CCD Ratio) being made by banks and financial institutions will be abolished. According to the previous monetary policy, banks and financial institutions were allowed to maintain a maximum CCD ratio of 85%. In place of this provision, banks and financial institutions are required to maintain a maximum of 90% credit to deposit ratio by mid-Asadh 2079 BS.

Arrangements will be made to act as a retail microfinance institution if the wholesale credit provider and the retail microfinance financial institution merge in the merger and acquisition process. In addition, arrangements will be made to merge the commercial banks, development banks and finance companies with cross-holding microfinance institutions by mid-Asadh 2079 BS.