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National Council Members acquainted with the ‘Monetary Policy’ and ‘Priority Sector Lending’ in Bhutan by the Royal Monetary Authority

Posted on :17 September 2018

Upon the request of the Economic Affairs Committee of the National Council, officials from the Royal Monetary Authority of Bhutan (RMA) led by the Governor Dasho Penjore made a presentation on the ‘Monetary Policy’ and ‘Priority Sector Lending’ to the National Council Members today.

The presentation kicked off with opening remarks from Dasho Penjore who gave a brief background about why the need for such initiatives from RMA. The first part of the presentation was about the Monetary Policy covering topics such as its objectives, the monetary policy framework, credit management, reserve management, the initiatives on reserve management & the way forward with the overall objective to achieve price stability.

After the tea break, the Deputy Governor Ms. Yangchen Tshogyel presented on the ‘Priority Sector Lending (PSL)’. She informed the house that the main objective of this policy was to promote small & cottage industry giving opportunity to youths & farmers to become future entrepreneurs.

The Deputy Governor said that PSL familiarization workshop was carried out and Dzongkhag PSL committees formed in May last year.  The Dzongkhag PSL committees would be the first point of contact for the youths & farmers to approach with their ideas for financial assistance, she said. They will carry out their share of assessment and approve the proposal after which the proponents can approach the financial institutions for their support.

She also informed the house about the existence of PSL guidelines which was approved by the RMA board during its 126th meeting held on 27th June 2017. She said a series of consultations was carried out with all relevant stakeholders such as the MoAF, MoEA, MoF, MoLHR, NEC, NLC, BAFRA & DCSI which was then presented to the Cabinet as well. However, the implementation was started only from January this year.

Her presentation also covered very briefly on the role of borrowers to take advantage of the opportunities available while also revealing some statistics on the PSL in the various Dzongkhags from Jan-June, 2018. A total of 681 PSL applicants were received from 19 Dzongkhags out of which 511 PSL applicants were approved. Out of these, 278 applicants were then received by the financial institutions and a total of 127 were approved by them with a total loan sanction of 138.5 million.  

The Deputy Governor highlighted that majority of PSL activities were for Agriculture related projects & proponents mostly individuals with only a handful of groups. She also covered a little bit about future interventions & support such as capacity building that was needed, access to technology & markets.

The presentation ended with question & answer session followed by closing remarks from Dasho Penjore who thanked the Hon’ble Members for their participation.



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