BFIs can spend CSR money in e-payment promotion

Kathmandu, Feb. 28

The Nepal Rastra Bank has allowed the banks and financial institutions (BFIs) to spend 5 per cent money from their Corporate Social Responsibility fund in the promotion of electronic transaction.

Making amendments in the Integrated Directives 2077 for the BFIs, the central bank has created the new provision for them.

It amended the point 8(2) of the directives to allow the banks to restructure or reschedule the loans by the end of the current fiscal year 2020/21 if the borrowers repaid the 5 per cent loan of their total loan liability. The provision is amended to facilitate the borrowers that couldn’t pay 10 per cent amount of the total loan liability by the end of the first half of the fiscal in mid-January.

As per the earlier provision, the BFIs were not allowed to restructure or reschedule the loan until they received 10 per cent of the total interest amount.

The central bank also created a new provision to punish the board of directors and chief executive officer of a BFI in case the company violated the interest spread rate. In case the spread rate crossed the limit, it should be brought within the limit within the same quarter.

Likewise, commercial banks should maintain the share of call deposit in foreign currency within 10 per cent of their total deposits while development banks and finance companies have 15 per cent limit for the same.

Meanwhile, the central bank has barred the class ‘D’ microfinance institutions to from establishing a branch in the Kathmandu Valley without opening two branches outside it.

They would be allowed to open a branch in a ward in Kathmandu if there were not any branches of a microfinance company. 

Published in The Rising Nepal daily on 1 March 2021.