Third-Quarter Review of Monetary Policy

NRB bars BFIs from charging debt penalties throughout prohibitory period

KATHMANDU: Banks and financial institutions (BFIs) will not be allowed to charge any sort of penalty or extra fee on loans throughout the prohibitory order/lockdown imposed by the government to contain the spread of the coronavirus pandemic.

In its third quarterly review of the monetary policy for the current fiscal year, NRB stated that provisions will be made whereby BFIs will not be allowed to charge any sort of penalties on loan throughout the lockdown period.

Similarly, the central bank has barred BFIs from publishing any sort of auction or debt collection notice throughout not just the lockdown period but until one month since the lockdown is lifted.

The NRB has also made provision whereby, on request of customers, BFIs should renew existing term deposits, collateral, letter of credit and loan whose maturity period has been completed during the prohibitory period.

Similarly, NRB has also stated to provide special refinancing loan facility up to Rs 500 million for hospitals and industries establishing liquid oxygen plants and up to Rs 200 million refinancing loan facility for hospitals and industries setting up oxygen plants. The maturity period of such loans will be one year.

In case there is demand for loan to set up oxygen plants, arrangements will be made so that BFIs provide the loan in the base rate itself, as per NRB.

NRB has also stated to make arrangements to ensure that funds that BFIs have in their Corporate Social Responsibility (CSR) fund will be used for fighting the pandemic: purchasing oxygen cylinder, oxygen concentrator, life saving vaccine, medicine etc.

Meanwhile, the central bank has clearly stated that country is unlikely to achieve the initial growth target of 4% for the ongoing fiscal year as projected initially. “Though the economy was gradually recovering after the first lockdown, the second wave of the pandemic and different measures adopted to contain its spread is certain to hit the projected growth target,” states NRB.

Fiscal Nepal |
Tuesday May 18, 2021, 04:07:45 PM |

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