The Prime Minister, Jigmi Y. Thinley, said the recommendations put by the Bhutan Chamber of Commerce and Industry (BCCI) on current liquidity issues and the rupee shortage are not convincing.
Lyonchhoen was speaking in the meeting between the government and the representatives from the business community around the country yesterday.
BCCI had submitted 10 recommendations to the government last month.
The BCCI’s president said no new credit has been sanctioned by the financial institutions after March this year even though Royal Monetary Authority’s data shows no shortage of liquidity in the economy.
A recent study carried out by the BCCI reveals that there are over Nu.4 billion worth of private sector projects, including the ongoing ones and the ones in the pipeline, which requires funding.
“Such situation might have a negative impact on the country’s overall economy,” said the president.
Lyonchhoen said while it is important to provide credits to the private sectors for economic growth, in current situation, it is the collective responsibility of the government, concerned organization and private sector to initiate measures to resolve the issues.
The Finance Secretary, Lam Dorji, then briefed the meeting on the decisions of the government. He said external commercial borrowings through banks are impossible. “If banks borrow convertible currency and lend them in local currency, then the repayment issues will come up.”
However, he said, the Government will continue to support its companies for its capital requirements from outside. To facilitate the external commercial borrowings for business entities, the government will amend the guidelines, for the External Commercial Borrowings 2010.
On BCCI’s recommendation on opening new commercial banks and FDI banks, the finance secretary, said the freezing is till 2013.And to lift the freezing at this point would not be appropriate decision at current situation.
