June 6, 2023, Tuesday
Nepal 1:37:26 pm

Businessmen take to street against high interest rates

The Nepal Weekly
November 8, 2022

Industrialists Friday staged demonstration at Maitighar Mandala protesting against the high interest rates of the banks. Led by Nepal Chamber of Industries and Commerce Kathmandu, all district municipal chambers of industries and commodity associations of the Kathmandu Valley took part in the joint demonstration.

The industrialists associated with various organisations from other districts outside the valley also participated in the demonstration. 

They complained that the industrial sector was in trouble because of the existing banking policy, high interest rate and the provision of 100 per cent LC margin. They also said that the industrial and commercial sectors were in panic due to the high interest rates of the private banks.

Jaya Prasad Siwakoti, vice-president of Nepal Chamber of Industries and Commerce, Kathmandu, said that a peaceful and silent protest programme was staged  to warn the state against the inappropriate steps taken by the banking and financial sectors and the hiked interest rates which the entrepreneurs cannot afford to pay.

“Even though we have repeatedly asked the concerned authorities of the government to reduce the interest rate and create suitable environment for business operations, we have been forced to launch this protest to draw the government’s attention after the government did not listen to our demand,” he told The Rising Nepal.

Stating that they have informed the finance minister about the problems faced by the industries, the businessmen complained that no clear initiative has been taken to solve their problems.  

Showing the lack of investable funds in the market and the problem of liquidity, the banks have stopped providing financial facilities and assistance to the private sector. The industries that were affected during the time of the COVID-19 and had not been able to fully recovered were now facing more problems due to the Russia-Ukraine war.

Because of internal and external problems, businesses are complaining that the industries have been shut down due to the unexpected increase in interest rates in the bank loans, said Siwakoti.

According to Siwakoti, financial institutions have created fear among industrialists. “When the banks and financial institutions come to collect loans, they threaten to auction and increase arbitrary interest rates,” he said.

They said that the banks have increased the interest rate up to 100 per cent, showing the lack of investable capital, and have started charging for the free services provided by the bank earlier, and doubled the rate of other service charges.

They have urged the government to listen to the voices of businessmen, otherwise they would launch a nationwide protest after the election if the government did not address their demands, he said.

He said that the country’s economy would collapse if the government did not take initiative to reduce the interest rates and amend the existing working capital regulations introduced by the Nepal Rastra Bank.