Private sector urges government to develop mechanism to facilitate remittances through banking channels – myRepublica

KATHMANDU, 20 January: The private sector has asked the government to provide subsidies to increase interest rates on remittance earnings to enable migrant workers to send the money they have earned through banking channels.

In a meeting with Finance Minister Janardan Sharma on Thursday, three umbrella organizations – the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the Confederation of Nepalese Industries (CNI) and the Nepal Chamber of Commerce – demanded the government to facilitate the inflow of remittances. through banking channels to combat the current economic problem. According to them, the country receives only half of the actual amount of transfers due to the absence of a government mechanism to facilitate bank money transfers.

Currently, the government is struggling to maintain foreign exchange reserves mainly due to the decline in the country’s remittance income. It also had a negative impact on the liquidity position with banks. Importantly, an increasing use of the informal channel popularly known as “hundi” has been blamed for the recent drop in remittances.

FNCCI chairman Shekhar Golchha said the government should grant an additional interest rate on subsidies to migrant workers who send their money through banking channels. According to him, many banks have already started offering an additional 1% interest rate over the normal deposit type for the remittance transaction through formal channels.

CNI Chairman Vishnu Agrawal said the government must allow business outlets to operate by implementing safety protocols even amid the continued spread of the coronavirus. “Despite the high rate of spread, the risk due to the pandemic is relatively low at present. Thus, the government must develop a mechanism to manage the economic activities smoothly,” Agrawal said.

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