As every fiscal year end, the central bank has extended the time for customers to pay back the interest and loan taken from banks and financial institutions (BFIs) by 15 days, after the expiry of the fiscal year.
Releasing a circular to the licensed bank and financial institutions (BFIs) today, Nepal Rastra Bank (NRB) extended the time to pay back loans and interest within this fiscal end by next 15 days. The central bank also said that customers might find it difficult to pay back the amount on time due to the natural disaster caused by the recent floods, landslides and incessant rainfall across the country.
Even banks have not been able to operate in most of these areas due to the ongoing floods and landslides. The new regulation implies that borrowers will have an additional 15 days for the repayment of the loans.
The private sector has lauded the central bank's decision. Issuing a press note, the Confederation of Nepalese Industries (CNI) has welcomed the decision of the central bank to extend the payback period of loans and interests.
Meanwhile, the central bank has also taken a flexible approach on the enforcement of the rule that requires bank and financial institutions in meeting the directed sector lending requirement. “The NRB extended the deadline to meet the directed sector lending requirement by six months,” reads the circular. “While BFIs were required to comply with the directed sector lending requirement by mid January, the central bank has now allowed them to abide by the rule by mid-July.”
According to the directed sector lending requirement, a commercial bank must float 25 per cent of loans to priority sectors, while development banks and finance companies must float 15 per cent and 10 per cent of their loans on prescribed sectors.
Releasing a circular to the licensed bank and financial institutions (BFIs) today, Nepal Rastra Bank (NRB) extended the time to pay back loans and interest within this fiscal end by next 15 days. The central bank also said that customers might find it difficult to pay back the amount on time due to the natural disaster caused by the recent floods, landslides and incessant rainfall across the country.
Even banks have not been able to operate in most of these areas due to the ongoing floods and landslides. The new regulation implies that borrowers will have an additional 15 days for the repayment of the loans.
The private sector has lauded the central bank's decision. Issuing a press note, the Confederation of Nepalese Industries (CNI) has welcomed the decision of the central bank to extend the payback period of loans and interests.
Meanwhile, the central bank has also taken a flexible approach on the enforcement of the rule that requires bank and financial institutions in meeting the directed sector lending requirement. “The NRB extended the deadline to meet the directed sector lending requirement by six months,” reads the circular. “While BFIs were required to comply with the directed sector lending requirement by mid January, the central bank has now allowed them to abide by the rule by mid-July.”
According to the directed sector lending requirement, a commercial bank must float 25 per cent of loans to priority sectors, while development banks and finance companies must float 15 per cent and 10 per cent of their loans on prescribed sectors.
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