December 20: The entrepreneurs and businessmen of Biratnagar are obliged to pay taxes under different headings if they make profits above 20 percent. Meanwhile, this policy is not applicable for banks. The banks can earn as much as they want and are exempt of paying extra taxes. The Confederation of Nepalese Industries (CNI) has called upon the concerned authorities to cap the profits made by the banks as well.

The president of Province 1 chapter of CNI, Bhim Ghimire, along with other businessmen has warned the government that they will start protest if this unfair treatment continues.

 “We want to draw your attention to take the initiative to keep the banks’ interest rate unchanged from single digit and to keep the interest rate system stable and sustainable until the country's economic situation improves so as not to affect investors who have already invested in manufacturing industries and infrastructure projects,” said Ghimire.

Ghimire accused that the banks are getting motivated to earn profits like businessmen instead of being a medium to uplift the nation's economy.

A statement issued by the CNI says that the banks in Nepal have become profit-oriented just like the rich merchants of ancient period. The confederation has also stated that banks and financial institutions are the main reason for the economic turmoil and inability to build capital.

 “How long will the investors and the general public have to suffer due to the banks increasing  interest rates showing the problem of lack of liquidity?” the statement said, adding,  “We are beginning to realize that the industry is collapsing in the game of raising and lowering interest rates every month and that the government and the central bank are only taking care of the banks”.

The industrialists have also demanded that the investors of banks and the investors of industries should be different. President Ghimire questioned that since the investors of banks as well as industries are the same, does the central bank have any idea about where and how the economic activities of the country is heading towards? “We want to make sure that the central bank and the government do not ignore this,” reads the statement.

Mahesh Jaju, senior advisor to the confederation, said that the banks have stopped opening LCs for foreign trade and imports. He claimed that the trade of the country would come to stand still and cause a problem in supply of materials due to this activity of the banks.

“We are appealing to the government to prevent the country's economy from coming to a standstill, otherwise we will be forced to protest on the streets,” said Jaju adding that this will cause a reduction of government revenue.

During a recent press conference, Pawan Sarda, a member of the Constituent Assembly and former president of the Morang Trade Association and patron of CNI, said that there are problems occurring in imports of goods due to the banks. According to Sarda, the image of Nepali importers and exporters in international business has been tarnished due to the banks.

“After submitting documents to open an LC of Rs 200 million, the banks are demanding a deposit of Rs 50 million in advance,” said Sarda with the adding, “If we had 50 million, why would we seek loan?” He said that if the banks were reluctant to open ASL for foreign trade for a long time, the industries would automatically close down due to the lack of raw materials.