NRB to facilitate quake victims to build houses

Kathmandu, February 26

The National Reconstruction Authority (NRA) and Nepal Rastra Bank (NRB), today, agreed to disburse loans to quake survivors to rebuild their houses under deprived sector category.

The meeting held at NRA today in presence of Steering Committee Chair of NRA, Prime Minister Puspa Kamal Dahal, NRA CEO Govinda Raj Pokharel and NRB Governor Chiranjibi Nepal, has finalised certain conditions to provide subsidised loan to quake survivors through banks and financial institutions (BFIs), as per NRA officials.

“Prime Minister Dahal also had concerns regarding subsidised loans to the quake survivors,” said NRA CEO Pokharel, adding, “As the central bank has agreed to classify housing loans to the quake affected people under deprived sector category it will definitely help realise the government’s plan to extend subsidised loan worth Rs 300,000, which is an equal amount of the government aid to the beneficiary quake affected households.”

According to Pokharel, once the loan scheme is executed by NRB, households especially of the rural parts of the country will benefit as they will have substantial resources to rebuild houses. The foremost criteria to qualify for the loan is that the households must be listed in the beneficiary list of NRA to receive the government aid. Likewise, the house going to be reconstructed must have collateral value or the person availing the loan must have credible income source.

Those who avail this loan from BFIs will be barred from selling the house until the loan amount has been paid back. In today’s meeting, both the National Reconstruction Authority and Nepal Rastra Bank agreed to block the passport, citizenship certificate and social security funds from the local bodies if any borrower tries to default on the loan.

The central bank needs to issue the circular to BFIs to enforce this provision.

According to the Monetary Policy, class ‘A’, class ‘B’ and class ‘C’ financial institutions need to allocate five per cent, 4.5 per cent and four per cent of their total loan portfolio, respectively, to the deprived sector.

As the central bank has allowed class ‘A’ banks to defer the implementation of the direct lending provision to the deprived sector for this fiscal, this fund can be utilised to provide loans to support quake survivors to rebuild houses with earthquake resilient technology as there will be net availability of resources to rebuild houses worth Rs 600,000 including government aid and subsidised loan.