Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal Rastra Bank (NRB) Governor Dr. Biswo Poudel has been steadily relaxing policies since taking office, reversing some of the stricter measures introduced by his predecessor, Mahaprasad Adhikari.
On Monday, NRB extended the repayment period by two years for businesses that exceeded working capital loan limits. Previously, such loans had to be cleared by mid-July 2024. Under the Working Capital Loan Guidelines, 2079, loans issued before mid-October 2079 that exceed the set limits can now be repaid in equal installments by mid-July 2027.
However, loan loss provisions cannot be reversed until the loans are regularized, and this adjustment will not be treated as loan rescheduling or restructuring, NRB clarified.
Additionally, for loans up to NPR 20 million in specified sectors (agriculture, energy, micro, cottage, small, and medium enterprises) facing difficulties, NRB has allowed one-time rescheduling or restructuring upon the borrower’s request. This requires analyzing business plans and cash flow, recovering at least 10% of due interest, and meeting other conditions. Such restructuring must be completed by mid-October 2025, with loans classified at least in the same category as of mid-January 2025.
NRB also extended the deadline to mid-July 2028 for “B” class financial institutions to allocate at least 20% of total loans and “C” class institutions to allocate 15% to agriculture, micro, cottage, small businesses, energy, and tourism sectors.
While these measures are expected to provide relief to businesses, some experts warn that they could pose risks to financial discipline.
Your email address will not be published. Required fields are marked *
Comment *
Name *
Email *
Website
Save my name, email, and website in this browser for the next time I comment.
