Through its monetary policy released today, the central bank has
slashed the requirements of cash reserve ratio by 1%, 5% for ‘A’ Class
commercial banks, 4.5% for ‘B’ Class development banks and 4% for ‘C’
Class finance companies.
The reduction in CRR by 1 percent will generate more than Rs 10 billion in terms of liquidity for investment which will help to decrease market interest rate. This will have a positive effect in the share market.
As per the official of Laxmi Captial, “This monetary is very much favorable for the stock market since its has reduced CRR which will generate excess liquidity in market resulting lower interest rate”.
Not only CRR, the reduced SLR ratio will also help banks to avail excess liquidity for investment. Statutory Liquidity Ratio (SLR) has been decreased 12% for ‘A’ Class commercial bank, 9% for ‘B’ Class development banks and 8% for ‘C’ Class finance companies.
The NRB has fixed the bank rate at 8% and net interest spread rate at 5% for all financial institutions. Finance institutions' customers will benefit from the fixed interest spread rate. This will force the institutions having more spread rate than 5% to bridge the gap by decreasing the interest rate on lending.
The new monetary policy has also delineated ways to make merger process easier to promote merger among banks and finance companies. The policy also pledges to come with acquisition laws soon.
Meanwhile, all financial institutions must raise their paid up capital to the prescribed level by the end of Asar 2071, as per the monetary policy. Gradually, the capital base of financial institutions will also be increased as per the requirements.
The paid up provision will be forced on all financial institutions which have yet to meet the requirement by end of this fiscal year. Now, it is mandatory for companies like NCC Bank to meet this provision within this fiscal year.
Likewise, the microfinance sectors will benefit by the provision of increment of percentage of investment on deprived sector. Mandatory deprived sector lending for financial sectors has been increased. Class A commercial banks would now be obliged to set aside 4.5% of their total lending for deprived sector. The obligation for ‘B’ Class development banks is 4% and 3.5% for ‘C’ Class finance companies.
More, still the license to open A,B and C Class financial institutions not opened.
src : sharesansar
The reduction in CRR by 1 percent will generate more than Rs 10 billion in terms of liquidity for investment which will help to decrease market interest rate. This will have a positive effect in the share market.
As per the official of Laxmi Captial, “This monetary is very much favorable for the stock market since its has reduced CRR which will generate excess liquidity in market resulting lower interest rate”.
Not only CRR, the reduced SLR ratio will also help banks to avail excess liquidity for investment. Statutory Liquidity Ratio (SLR) has been decreased 12% for ‘A’ Class commercial bank, 9% for ‘B’ Class development banks and 8% for ‘C’ Class finance companies.
The NRB has fixed the bank rate at 8% and net interest spread rate at 5% for all financial institutions. Finance institutions' customers will benefit from the fixed interest spread rate. This will force the institutions having more spread rate than 5% to bridge the gap by decreasing the interest rate on lending.
The new monetary policy has also delineated ways to make merger process easier to promote merger among banks and finance companies. The policy also pledges to come with acquisition laws soon.
Meanwhile, all financial institutions must raise their paid up capital to the prescribed level by the end of Asar 2071, as per the monetary policy. Gradually, the capital base of financial institutions will also be increased as per the requirements.
The paid up provision will be forced on all financial institutions which have yet to meet the requirement by end of this fiscal year. Now, it is mandatory for companies like NCC Bank to meet this provision within this fiscal year.
Likewise, the microfinance sectors will benefit by the provision of increment of percentage of investment on deprived sector. Mandatory deprived sector lending for financial sectors has been increased. Class A commercial banks would now be obliged to set aside 4.5% of their total lending for deprived sector. The obligation for ‘B’ Class development banks is 4% and 3.5% for ‘C’ Class finance companies.
More, still the license to open A,B and C Class financial institutions not opened.
src : sharesansar
