The Finance Minister Lyonpo Namgay Dorji confirmed that the Royal Monetary Authority (RMA) would be opening up housing, car and vehicle loans from mid August.
Lyonpo said that his ministry had a series of meetings with the RMA on the opening up of loans and that loan guidelines were in the final stages. He said that the day before the ministry had a whole day meeting with RMA on the guidelines.
Referring to the government directive freezing all government office construction activities the minister said that this was done to ensure there is less pressure on the rupee when the loans are opened up.
He also clarified that it was possible to open up loans due to the government’s recent taxes.
The minister said, “The two main economic policies of a country are fiscal policies and monetary policies. Monetary policies like that of RMA are only short term and so now with the government opening up loans it becomes possible for the RMA to open up loans.”
The Prime Minister Lyonchhen Tshering Tobgay said that the economy was under a lot of stress as recently as a year ago with the issue of rupees becoming an issue of immense concern.
He said that economy has improved and the rupee situation has improved due to the steps taken by the government which involved a lot of hard work and also sacrifices made by the people.
Lyonchhen, however, cautioned that the economy was far from perfect and still a lot had to be done to strengthen the economy.
He said to insure that the situation does not repeat again they would have to produce goods within the country, use local resources and not depend on imported resources. He said the country was still dependant on imports and people would have to be mindful of that.
The RMA had posted draft guidelines on 11th July on its website that opened up housing, car and consumer loans. The commercial housing loans for rent or sale had a cap of Nu 2 mn followed by a once in a lifetime per family Nu 3 mn cap on residential home loans. There was also a Nu 500,000 cap on consumer loans. The guidelines also proposed stricter conditions on giving loans.
The Financial Institutions Association of Bhutan (FIAB) recently called on RMA to remove the caps and relax some of the guidelines.