Money
NRB extends loan repayment deadline
Nepal Rastra Bank (NRB) has extended the loan repayment deadline for borrowers by one year and relaxed provision of loan loss provisioning considering the uneasy situation caused by long-running Tarai banda and undeclared Indian embargo.Nepal Rastra Bank (NRB) has extended the loan repayment deadline for borrowers by one year and relaxed provision of loan loss provisioning considering the uneasy situation caused by long-running Tarai banda and undeclared Indian embargo.
The central bank has also allowed the banks and financial institutions (BFIs) to increase the grace period of starting loan payment for various business and development projects by one year while extending deadline repayment for trust receipt loans that are provided to importers.
Responding to the call from bankers and business community to provide certain reliefs to the borrowers in the context of Indian embargo and banda, the central bank relaxed the existing provisions to give more time to pay loans.
In a circular issued on Tuesday, the central bank said that BFIs could reschedule and restructure the loans extending the loan repayment deadline by one year for the loans provided to industries, businesses, education, tourism (hotel, airlines, travel agencies etc), energy (hydropower production, transmission and distribution) and service sector.
In order to reschedule and restructure the loan, the NRB said that the borrower should submit work plan on loan rescheduling and restructuring, concerned bank or financial institution should be assured that borrower's capacity to pay loan has diminished and rescheduling and restructuring should be completed by mid-January 2016.
The rescheduled loans can be categorized as good loan but its details should be prepared separately, according to NRB.