Notice No. 21/076/77 dated 16/01/2076 (28 April 2020)
Nepal Rastra Bank (NRB) being the central bank of Nepal has its role in effective supervision of banking and financial system. The situation of lockdown caused by the global COVID-19 pandemic has raised serious concern over the national as well as global economy and financial system. In regard to ease the situation by relieving debtors borrowing loans from licensed banks and financial institutions, NRB has directed banks and financial institutions to ensure following reliefs. Based on Section 79 of the Nepal Rastra Bank Act 2002 (2058) that provides NRB the full right to regulate banks and financial institutions, NRB has issued direction that includes following reliefs:
- NRB has directed banks and financial institutions to reduce interest rate on bank loans by 2 % points for the purpose of reducing adverse impacts caused by COVID-19. The fourth quarterly calculation of interest amount for this fiscal year has to be done by reducing the 2% interest rate on the prevailing rate of interest. The “D” class microfinance transacting retail loan has to decrease interest rate on loan by 3% while microfinance transacting wholesale loan has to provide relief on interest rate by reducing the rate by 2% for the fourth quarterly interest calculation this fiscal year.
- NRB has also provided facilitation directing banks and financial institutions to provide up to 10% additional current capital loan out of approved limit to those needy business enterprises that provides assurance as of effect on their projects or businesses and financial condition due to COVID-19.
- The payment deadline of monthly or quarterly installment to be recovered in Baisakh and Jestha are extended by facilitating to make payment within the month of Ashad 2077. On such payment no penal charges or penal interest shall be levied.
- The payment of principal and interest of every short term loan having the nature of current capital that is to be paid during this Lockdown period can be extended up to 60 days.
However, this relief has not been provided to business related to sales and distribution and refinement of foods, production and distribution of gas, soap and chemicals, business related to distribution of medicine, internet service provider, telecommunication service provider, television service provider, industries related to tobacco and alcohol and hydropower projects on operation.
Such business enterprises having been affected by COVID-19 may be tourism related businesses and aviation including hotel, restaurant, resort, travel, trekking businesses, vehicles having commercial purpose, small and cottage industries, export industry, entertainment industry, hospital, poultry business, etc.