HIMALAYAN NEWS SERVICE
KATHMANDU: The central bank has asked financial institutions to design the repayment schedule for agro loans in tandem with the crop cycle.
Issuing a directive today, Nepal Rastra Bank (NRB) has asked class ‘A’, ‘B’ and ‘C’ financial institutions to make the repayment schedule of the loans floated to farmers in such a manner that the harvesting season and the loan installment payment period matches.
“The provision will ease loan repayment for farmers because during the harvest season they earn substantial income while the rest of the year the farmers do not earn enough money,” pointed out spokesperson for NRB Bhaskar Mani Gyanwali. “Even the financial institutions will not have much trouble in recovering loans if they match their repayment schedule with the harvests,” he added.
The central bank and the government have been trying to channel the funds of the financial institutions to the agriculture sector to boost development in
the sector that employs a maximum number of the population. It had directed banks to float a minimum of 10 per cent of its total lending to the agriculture and hydropower sectors
in order to propel funding in the sectors.
The same circular has also asked the financial institutions to record the name of the individual or firm who knowingly closes their bank account in order to avoid the cashing in of cheques that they have
issued. “This will prevent anyone from being cheated in case the account holder decides to dupe by closing the account after issuing cheques,” pointed out Gyanwali.
Likewise, the circular has also allowed non-government organisations (NGOs) that are permitted by NRB to work as financial intermediaries to acquire 25 per cent stake in class ‘D’ microfinance development banks provided the NGOs agree to scrap their licence.
Investors meet governor
KATHMANDU: Investors on Sunday held a meeting with Nepal Rastra Bank (NRB) governor Dr Yubaraj Khatiwada to urge the central bank to ask financial institutions to go easy on loans taken against shares. The forced selling of shares pledged against loans has fuelled the downturn in the market, they said, requesting the central bank to introduce a provision
of making financial institutions invest five per cent in stocks in order to manage the oversupply.