"Review the ceiling fixed on working capital loans"

KATHMANDU, AUGUST 29 : The Federation of Nepalese Chamber of Commerce and Industry (FNCCI) has suggested to review the ceiling fixed  on the working capital loans floated towards the businesses/industries belonging to the productive sector.

 "Depending on the nature of businesses, the required amount of their working capital varies. So, it is imprudent on the part of the Nepal Rastra Bank (NRB) to set the ceiling of only 25 percent for the working capital loans amounting over Rs 20 million," states the apex body of Nepali business fraternities issuing a press release. 

Last week, the central bank tightened the screws on this kind of lending by coming up with a guideline.

The FNCCI argues that the banks themselves should be allowed to fix the limit on working capital loans and that such types of loans need to be floated continuously rather than for a period of only 5 years.

"The Nepali commerce and industrial sector has already been dogged by fluctuations in interest rates,  national and international economic volatility;  and exorbitant cost of fuel, raw materials and logistics, among others, And, the latest provision of a 25  percent ceiling on working capital loans is sure to further exacerbate the plights of the sector," the FNCCI says," As such, we urge the central bank to immediately do away with the very provision  and set a new one."