NRB to updates its operational procedures in particular sector that were experiencing financial difficulties

KATHMANDU: The Nepal Rastra Bank (NRB) has put into effect a rule requiring refinancing facilities to be offered at discounted rates to underperforming production, construction, wholesale, and retail businesses.

The NRB has put into effect the change that was announced in the third quarterly review of the monetary policy for 2022–2023 by revising the refinance working guideline.

The NRB has thought about offering unique refinancing options to companies that experienced negative growth for two consecutive quarters.

It has been decided that Rs 6 billion is the maximum refinancing amount. The NRB guideline states that loans that are issued for import-based business activities are not eligible for the special refinancing options.

Up until mid-July 2024, the central bank has said it will offer rescheduling and restructuring options for loans up to Rs 50 million.

However, only businesses involved in lodging, dining, raising livestock, and construction are covered by the provision. .

However, the central bank has now decided to offer the facilities to the underperforming companies, citing the ongoing economic downturn. During the second quarter (mid-October 2022 to mid-January 2023) Nepal experienced a growth rate of -1.1%.

Additionally, the National Statistics Office (NSO) forecasted that the country’s economic growth rate would be just 2.16 percent in the current fiscal year, which is nearly four times less than the government’s target.