May 21, 2024

NRB issues circular on loan restructuring and re-scheduling

NRB issues circular on loan restructuring and re-scheduling

KATHMANDU, May 18:Nepal Rastra Bank has given banks and financial institutions a deadline to reschedule loans relating to hotels and restaurants,livestock and loan related to construction sector.

On Wednesday, Nepal Rastra Bank issued integrated directions to banks and financial institutions in categories A, B, and C, stating that they can reschedule and restructure their loans by charging at least 10% interest.

The Nepal Rastra Bank has stipulated that such reorganization or restructuring be completed by June 16, 2023. On Wednesday, the Nepal Rastra Bank issued a single direction to implement the announcement made in the third monetary policy review.

According to Nepal Rastra Bank, this provision will also apply to loans up to 50 million in all other areas outside the designated zones. Rastra Bank claims that loans categorized as active at April 13, 2023 can be postponed or modified. A loan loss reserve of 5% should be maintained in such rescheduling or restructuring.Rastra Bank's condition is that the classification of the rescheduled or restructured loan cannot be changed.