Kathmandu, Sept. 26
The Nepal Rastra Bank (NRB) has announced
various relief measures, including a discount on interest on business loans,
restructuring and rescheduling of such loans, and a subsidy on them.
Amending its Unified Directives 2081, the
central bank issued a circular allowing the banks and financial institutions
(BFIs) to restructure or reschedule loans of businesses, industries and other
borrowers affected in course of the Gen Z movement and other unusual
circumstances, by mid-January 2026.
However, the borrowers should request the
respective BFIs for the rescheduling or restructuring of loans that fall into
the criteria defined by the NRB. Loans
that have been reclassified or restructured as per the newly set criteria shall
be classified in the same category as they were as of mid-July 2025, and the
same loan loss provisions must apply, read the directives.
As per the new
directives, in the case of industries/businesses directly affected by the Gen Z
movement, when providing loans for their rehabilitation and operation, BFIs must
set the interest rate by adding a maximum of 0.5 percentage points to the base
rate, until the business is operational.
For such loans, if the
capital adequacy ratio exceeds 80:20, the loan must be classified under the ‘micro-monitoring’
category, but an exemption of one year is granted.
Same interest rate
provisions will be applied to the loan, requested by the Gen Z
movement-affected business establishment, to pay wages through the banking
system. However, such loans can be disbursed for up to one year or until the
business begins operation, whichever is shorter.
The interest rate on
such loans will receive a 2 per cent interest subsidy from the government for
up to six months. The BFIs should pass the subsidy onto the borrower.
Applications for loans for the ‘payroll protection scheme’ should be submitted
to the BFIs by mid-January next year.
Likewise, industries
that employ at least 100 women, provide a minimum of 25 per cent value
addition, and export at least 25 per cent of their total production may have
their loan interest rate set by the authorised institution at the base rate
plus a maximum of 1 percentage point.
The central bank has
made significant revisions in vehicle loan provisions. For industries and
businesses directly affected by the movement, loans for replacing commercial
vehicles and transport vehicles damaged in the course of operations may have
their loan-to-vehicle value ratio increased up to 80 per cent from the existing
60 per cent.
Meanwhile, facilities
are also extended to the traders and businesses that experienced loss and
damage due ty the natural disasters at the Rasuwagadhi and Tatopani customs
points – major cross-border trade points with China. As the floods in July
swept away the bridge connecting Nepal and China at Rasuwagadhi, cross-border
trade has since been affected. Likewise, transportation has long been affected
due to multiple landslides along the Arniko Highway connecting Tatopani.
Affected businesses
can request the reclassification and restructuring of their loans, said the
NRB. This loan will have the same provisions applied to the movement-affected
business.
Published in The Rising Nepal daily on 27 September 2025.
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