Kathmandu, January 4

In the wake of widespread criticism from the private sector, Nepal Rastra Bank (NRB) today amended the Working Capital Loans Guideline 2022.

The NRB has allowed repayment of the working capital loans in five instalments and extended the repayment deadline till mid-June, 2025. As per the revised guideline, the repayment will be implemented after six months wherein borrowers will have to first pay 10 per cent, followed by 20 per cent instalment every six months. Moreover, the borrowers will have to pay 30 per cent of the total loan amount in the last instalment.

Earlier, the deadline for the repayment of such loans was till mid-June 2023.

There is a provision in the revised guideline that if a borrower wants to repay the loan before the maturity period, no additional fees will be charged.

As per the revised guideline, the large businesspersons can get up to 25 per cent of their total annual turnover/sales (in fluctuating working capital) from banks and financial institutions.

The guideline will not be applicable while taking a working capital loan of up to Rs 10 million. Earlier, the NRB had capped the working capital loan at five million rupees.

BFIs can classify and disburse periodic loans related to permanent working capital for a period of three to 10 years.

Meanwhile, as per the revised guideline, the working capital loan-seekers will be required to present financial statements of five years. Earlier, such loans could be granted after studying the financial statements of three years.

A version of this article appears in the print on January 5, 2023, of The Himalayan Times.