Banks gave away Rs 13 billion interest waiver to borrowers during COVID-19 pandemic

KATHMANDU: Banks and Financial Institutions (BFIs) have given interest waiver of around Rs 13 billion to the borrowers during the COVID-19 pandemic in line with the directive of the Nepal Rastra Bank (NRB).

According to the Nepal Bankers ‘Association (NBA), the umbrella organization representing 27 commercial banks of the country, banks’ incomes have declined this year due to the unfavorable circumstances created by the COVID-19 pandemic and the interest rate waiver that banks had to give to borrowers who were in trouble.

Under the two percent interest waiver to borrowers, commercial banks have given Rs 9.67 billion waiver, development banks Rs 965 million, financial companies Rs 146.7 million and microfinance Rs 1.47 billion.

A chief executive officer (CEO) of a commercial bank complained that the NRB paid more attention to the interests of industrialists and businessmen than problems faced by BFIs during the pandemic. “Despite regulatory and government pressure to BFIs, most of the financial institutions agreed to support the industry and business.,” he said.

Former NRB executive director Nara Bahadur Thapa, on the other hand, said that the policy taken by the central bank during the COVID-19 pandemic were good and timely. “NRB’s Monetary Policy had been more effective than the government’s policies in protecting the overall economy, including industry and business. NRB had made arrangements to increase interest rate rebate, rescheduling loans, increase credit to productive sector from 25 percent to 40 percent through monetary policy,” said Thapa.

Thapa said that the initiative taken by the central bank to save the banks and industrialists and businessmen during the crisis was good. However, he said that economic activity has not been able to increase as the NRB has kept the ratio of investment in home loans to the same level during even during the pandemic.

Fiscal Nepal |
Friday March 5, 2021, 01:57:34 PM |

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