CBFIN’s recommendation to retain the loan-to-deposit ratio at 95%

KATHMANDU: The Confederation of Banks and Financial Institutions (CBFIN) has recommended that the NRB keep the CD ratio at 95%.

The confederation stated at a press conference in Kathmandu on Thursday that necessary policy arrangements should be made to maintain investment in the productive sector by maintaining the current CD ratio of 95 percent.

Similarly, the confederation has proposed that the right to decide how profits earned by banks and financial institutions are distributed be granted to the institutions in accordance with the law.

According to the confederation, the provision of 100 percent deposit of local body money will aid in the flow of credit to the productive sector.

Confederation Chairperson Pawan Golyan stated that an agreement should be made to increase investment in the productive sector in order to promote exports by continuing to tighten imports of unnecessary and luxury items.

He suggested that the NRB make plans to reduce interest rates on loans to productive industries by 4% rather than loans to unproductive or less productive sectors. He stated that the NRB should pay attention to this because imports could rise if the productive sector is not given access to credit.

He stated that banks and past institutions should not only make money but also contribute to the country’s economic development.

The confederation has also proposed introducing appealing schemes to save a portion of remittances through special arrangements in remittance inflows.

The confederation also proposed prohibiting the import of agricultural commodities and materials other than critical agricultural raw materials, as well as discouraging wasteful spending and the use of unnecessary goods and services.