Hotel Association Pokhara's demand to reduce interest rates

KATHMANDU, Oct 16:The Pokhara Hotel Associationhas submitted a letter of attention to  Nepal Rastra Bank, urging assistance in sustaining the tourism industry, which has been hampered by the Corona pandemic.

On Friday, the Association brought Governor Mahaprasad Adhikari's attention to the fact that the procedures for rescheduling, restructuring, and reinvestment of loans invested in the tourist sector should be prioritized in accordance with Nepal Rastra Bank norms.

A team from the association visited the Nepal Rastra Bank office in Pokhara and delivered a letter to the office's director, Arya Joshi. The impact of COVID-19, the Russia-Ukraine war, the chaotic highway to Pokhara, and the plane crash of Yeti Airlines, according to Laxman Subedi, president of Hotel Association Pokhara, have all had an influence on Pokhara's tourism.

President Subedi stated that tourist arrivals in Pokhara have fallen for a variety of reasons and that he is currently unable to pay the loan principal and interest to banks and financial organizations.

Demanding a payment system and long-term installment payments, the association has drawn attention to the fact that banks and financial institutions cannot charge any kind of penalty fees, cannot force businessmen to pay loans, and cannot make businessmen's mortgage auctions mandatory.

Given the worsening economic situation of the tourism sector, the interest rate of the investment in the tourism sector should be set at a single digit, only the base rate of interest should be maintained, and the audit report of the tourism sector and the gross operating profit in the balance sheet should be continuously negative, and the bank's arrangement to block the flow of loans should be removed, and the investment in electricity generation should be removed. The association requests that the system be applied in the tourism industry.

To address the issue of cash flow owing to a lack of income, banks should grant an 80% loan after an actual appraisal of the property, and because the tourism industry has been hit the worst by the financial crisis, special arrangements should be made to provide more concessional loans. The association also requests that the hotel business, which was unable to renew its license due to the delay in the environmental assessment, be able to quickly renew its foreign currency transaction license from Nepal Rastra Bank.

The hotel and tourism sectors, like the agricultural sector, should be given concessional loans, and the hotel sector's VAT tax should be cut. Since the hotel and tourism industry's financial situation has not improved, the accrued interest up to the end of June 2081 should be computed individually, and no penalty interest should be applied. Additional loans should be made available at low interest rates, and loan processing fees should be subsidized.

When paying commissions to international agents in dollars through hotels, the payment limit should be increased, and the process is cumbersome, so the association has also requested that a dollar prepaid card in the name of the person specified by the hotel be provided. Because credit cards are used for the majority of purchases and transactions by overseas tourists, the bank's 3 percent service fee for using credit cards is excessive, so the organization proposed that it be cut to a maximum of 1 percent.

Following receipt of the attention letter, Joshi, director of the Pokhara office, stated that he is supportive of the businessmen's concerns and pledged to forward them to the central office as soon as possible.