NRB announced relief packages for banks and businesses

Kathmandu, Mar 29

Nepal Rastra Bank has extended the payment of monthly and tri-monthly instalments of loan payable by mid-April to till the end of the current fiscal year, mid-July 2020.

Announcing a relief package for the banking sector amidst the fears of coronavirus pandemic and its impact on the banks and financial institutions (BFIs) and business and industries, the central bank has barred the BFIs from imposing any penal charges and penal interests to the monthly or tri-monthly instalments, including credit cards, of the Nepali month of Chaitra, mid-April.

In the first of any relief programme to be announced by any government agency, it has also said that if any borrower pays the mid-April instalments, they should be provided with 10 per cent discount in interest amount. Likewise, all short-term loans' term can be extended up to 60 additional days.

If any borrower from the tourism and transport sectors, who have been paying the capital and interest regularly till the end of the first six month of the current fiscal year, demand short-term loan, the BFIs must mobilise the loan within 5-day of the application, and they should not charge more than 0.25 per cent of the loan amount.

Facility for health facility

The central bank has said that if any private sector hospitals and health facilities wanted to upgrade or expand their service and facility in order to support the treatment of coronavirus patients, loan extended to this sector would be counted as 'primary sector lending'.

Currently, agriculture, hydroelectricity and tourism are the primary sector.

The banking sector regulator has also allowed the BFIs to count the money they contributed to the coronavirus control and treatment funds created by the federal or local governments to count as the Corporate Social Responsibility (CSR).

Loan for any health materials recommended or listed by the government for the treatment of Covid-19, equipment, medicines and food items should be approved within 5 days of application, directed the NRB.

Similarly, priority would be given to the small and medium scale enterprises affected by Covid-19. Such loan facility would include the current capital loan as well.

Nepali workers who had obtained the government permission to go for foreign employment but forced to stay back due to coronavirus outbreak can apply for concessional loans to run any business in Nepal after the risk is over. Such loan will be mobilised within a week of application.

Published in The Rising Nepal daily on 30 March 2020.