The central bank has directed the bank and financial institutions (BFIs) not to auction the collateral of borrowers, if the loan amount remains overdue for six months only.
Revising the unified directives today, Nepal Rastra Bank (NRB) has revised the provision to give respite to the borrowers, who have been adversely affected by the Covid-19 pandemic. Currently, most of the BFIs have been taking into auction the debtors’ property even, when the payment is delayed by just a month.
The central bank has also intervened in the financial market earlier this year, after many BFIs hav been found threatening the borrowers to make public their profiles in daily newspapers or blacklist them as loan defaulters due to delayed payment. According to the new provision, the BFIs can initiate auction, only if the loans fall in ‘doubtful’ category.
The central bank, through revised unified directives, has also revised the list of businesses highly affected by the pandemic. The list of highly affected business by the pandemic now includes private and residential schools, higher secondary schools, colleges and universities, vocational training institutes, preschool and child care. Similarly, land transport, beauty parlors, cosmetic surgery and related businesses, consultancies and health centers, and fitness centers are also categorised as highly affected businesses due to pandemic. Earlier, those businesses were listed under the medium-affected group.
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