Flood and fire affected to get subsidised loans

Kathmandu, January 9

The people affected due to the floods in Saptari and the fire in Tehrathum and Bhojpur districts will get subsidised loan facility from banks and financial institutions to get back on their feet.

Issuing the ‘Refinancing and Reoperation Bylaws 2018’, Nepal Rastra Bank (NRB) — the central monetary and regulatory authority — has directed the banks and financial institutions (BFIs) to extend subsidised loan facility to the affected people of aforementioned three districts.

Victims will get the loan on two per cent interest rate and banks will not be able to take any extra charge from the victims while issuing the subsidised loans.

As per the bylaws, fire victims of Bhojpur and Tehrathum districts, who are living in urban areas, will be able to get between Rs 1.5 million and Rs 2.5 million from BFIs as subsidised loan. Similarly, flood affected people of Saptari will be able to get maximum subsidised credit of Rs 1.5 million from BFIs.

Victims will have to present a recommendation letter from the District Natural Disaster Rescue Committee (DNDRC) to be eligible to get the subsidised loan from the BFIs. The central bank will provide the refinancing facility to the BFIs that issue the subsidised loan.

Victims will get the loan facility for a period ranging from five to 10 years, in which the first year will be counted as grace period. This means that if any victim is unable to pay the interest in the first year, it will not be counted as non-performing loan.

BFIs will be able to provide the subsidised loan in up to four instalments. BFIs will have to submit the monthly report of the loan issued under such heading to the central bank. Similarly, as per the bylaws, BFIs will have to be attentive and determine the authenticity of recommendation of DNDRC.

Earlier, the central bank had issued such bylaws to facilitate the victims of devastating earthquakes of April and May, 2015. However, due to long and complex procedures, very few victims utilised the facility provided by government.

Meanwhile, the National Reconstruction Authority (NRA) has allocated Rs 1.04 billion to the people affected due to the cold spell in the Tarai region. The NRA has sent the money to the Ministry of Home Affairs to provide warm clothes to the people affected in the plains.

“The 41,626 families that had been affected due to the floods in Tarai are the most vulnerable to the cold spell. So, government will provide each affected household with warm clothes worth Rs 15,000 and Rs 10,000 in cash,” said NRA Spokesperson Yam Lam Bhoosal.