NRB’s new directive to banks and financial institutions: Major highlights

KATHMANDU: The Nepal Rastra Bank (NRB) on Monday issued a circular tightening different provisions to banks and financial institutions (BFIs). Below are the major points to know:

1. General Loan Loss Provision – 1.3% instead of 1% for FY 2077/78 and onwards ( Gross Industry Effect : 11 Billion LLP Expenses Increased )

2. Grace period of 1 Year can be added to Top Up Facility of 10% to Term Loan and 20% to Revolving Loans provided to COVID Impacted sector, Subject to 5% LLP,

3. Quarterly Unaudited Financial Publication time period for Q4 has extended to Shrawan end from 15th Shrawan,

4. Cash Dividend restrictions ( Same as Last FY) : 30% of Distributable Income or Average Deposit Rate Which ever is lower / DPS Maximum 5%, No Cash Dividend,

5. Waiver in Compulsory 3% Staff Training Expenses ( Shortfall ) Provisioning requirement for FY 2077/78,

6. Banks can adjust Interest Recovered with Bhadra 15th 2078 as Interest Income Realized in FY 2077/78 ( No need to allocated Regulatory Reserve or that can be consider for distribution)