IT and export-oriented industries added to mandatory lending list in Monetary Policy review

KATHMANDU: Banks and financial institutions will now be required to channel credit into information technology and export-oriented industries after Nepal Rastra Bank expanded the list of priority sectors through its latest monetary policy review.

The central bank announced that tourism, information technology, and export-driven industries based on domestic raw materials will be incorporated into the existing sectoral lending framework. The framework had previously focused mainly on agriculture, energy, and micro, cottage, and small enterprises.

With the revision, banks will be obliged to maintain minimum lending ratios in each of these sectors, though the exact thresholds are expected to be adjusted through further regulatory directives.

Credit Flow Shift Toward New Growth Sectors

Officials say the decision is intended to redirect institutional lending toward industries with stronger growth potential, employment generation capacity, and foreign exchange earnings prospects.

The inclusion of the IT sector signals a policy push to accelerate Nepal’s digital economy and position the country as a potential regional technology outsourcing destination. Meanwhile, expanding credit access for export-oriented industries is aimed at strengthening domestic production and reducing import dependence.

Bankers note that mandatory lending provisions typically have a strong impact on credit allocation patterns, meaning the change could significantly increase institutional financing for technology startups, software companies, and manufacturing firms producing export goods from local inputs.

Minimum Lending Ratio Rules to Be Revised

The central bank said the existing provision requiring banks to maintain minimum credit exposure in designated sectors will be revised to accommodate the expanded list.

Financial sector analysts say the change could compel commercial banks to rebalance their loan portfolios, particularly those heavily concentrated in real estate, trading, and urban consumption lending.

If implemented strictly, the policy could increase long-term investment lending while discouraging speculative or short-cycle credit flows.

Push for Foreign Investment in Tech Infrastructure

The review also highlights facilitation measures to attract foreign investment into Nepal’s technology ecosystem.

The central bank said it will ease co-financing loans for projects linked to data centers, cloud computing infrastructure, and artificial intelligence development if such ventures attract foreign capital.

This provision is expected to support large-scale digital infrastructure projects that typically require significant upfront investment and multiple lenders.

Industry experts say the move aligns with broader government efforts to modernize Nepal’s digital backbone, improve data hosting capacity, and create conditions for technology exports.

Strategic Policy Signal

The inclusion of IT and export-oriented industries in the mandatory lending framework is widely seen as a strategic shift in monetary policy — from traditional credit expansion toward targeted structural transformation.

Economists believe the success of the policy will depend on how strictly lending ratios are enforced and whether banks develop the technical capacity to assess risk in emerging sectors such as software development, digital infrastructure, and advanced manufacturing.

The central bank has indicated that further implementation guidelines will follow, determining how quickly banks must adjust their portfolios and how compliance will be monitored.