Nepal | September 25, 2020

NRB mulls over extending moratorium on loan recovery

Himalayan News Service
Share Now:

Kathmandu, April 14

Nepal Rastra Bank is preparing to introduce a second phase relief package targeting businesses and individuals impacted by the novel coronavirus.

The central bank had introduced a few measures two weeks ago aimed at offering relaxation on repayment of loans for businesses and the public hit by the coronavirus pandemic. However, as businesses are completely shut since almost one month and it is still uncertain how the coronavirus pandemic will evolve, the central bank is working on a second phase of relief package, especially targeting businesses hit by the pandemic.

Owing to the fear of coronavirus spreading and the subsequent nationwide lockdown, all businesses across the country have been shut since March 24 when the lockdown was enforced.

Though NRB had introduced a few relief measures, the private sector and experts have been saying that the measures are inadequate. They have suggested that the government bring a ‘heterogeneous’ relief package that intends to upscale the economy.

Talking to The Himalayan Times, NRB Governor Maha Prasad Adhikari said the nature of the second phase of relief package would depend on the recommendations of a study committee that NRB had formed to assess the impact of the coronavirus  on different sectors and the entire economy.

“NRB is serious about mitigating the impact of the pandemic on businesses. As a study committee is carrying out an assessment, NRB’s future steps will be based on the recommendations and findings of the committee,” said Adhikari.

However, high-level officials at the central bank revealed that the upcoming relief package from NRB would basically be inclined towards further relaxations on repayment of loans for businesses and the public.

NRB has already deferred the collection of monthly or quarterly instalments (that were to be collected by midApril) from borrowers till mid-July.

The provision is applicable to all borrowers, including credit card holders. “However, as the lockdown has been prolonged, discussions are under way to further extend the loan repayment period (to be collected by midMay),” said an NRB source seeking anonymity.

The official added that NRB would possibly bring in sector-specific relief package soon. “Though every sector has become a victim of the pandemic, a few sectors have been more severely affected while others are less affected. The relief package will be more inclined towards sectors highly affected by the coronavirus,” said the NRB official.

Likewise, NRB is also dwelling on further increasing the size of the refinancing fund. In a bid to ensure availability of loan facilities for businesses hit by the coronavirus, the central bank had recently raised the size of refinancing fund to Rs 60 billion from Rs 50 billion.

However, NRB is likely to take at least a week to introduce the second phase of relief package as the study  committee is yet to complete its assessment of the  impact of the coronavirus on several sectors.

The private sector has been suggesting that the central bank bring down the interest rate on loans by three percentage points.

The Federation of Nepalese Chambers of Commerce and Industry had recently met Governor Adhikari and suggested that he bring down interest rate to help businesses revive from the devastation caused by the coronavirus.

The private sector has also sought special loan facility from the central bank to pay wages to workers.

A version of this article appears in e-paper on April 15, 2020 of The Himalayan Times.

Follow The Himalayan Times on Twitter and Facebook

Recommended Stories:

More from The Himalayan Times:

Kavre curfew

68 per cent COVID patients recover in Kavre district

DHULIKHEL, SEPTEMBER 23 A total of 68 per cent COVID patients have recovered in Kavre. Of the 552 people infected with the virus, 373 have recovered so far in the district. A total of 360 males and 192 females were infected with COVID. Of them, 230 males and 143 females have been cured, accord Read More...

Bagmati Province to provide Rs 3 billion subsidised loan

HETAUDA, SEPTEMBER 23 Bagmati Province is set to provide loan at subsidised interest for employment creation as well as production activities in the province. The Bagmati Province Cabinet meeting held today passed the procedures for providing loan meant for programmes related to agriculture, i Read More...

Six dead, four missing in two landslides in Syangja

POKHARA: Incessant rainfall has led to landslides in two places – Kaligandaki Rural Municipality and Waling Municipality – of Syangja district on Thursday. Two people were buried under the earth as a mass of land fell from above at 3 am in Kaligandaki Rural Municipality. One of them, a 16-yea Read More...

India adds 86K cases, junior minister among dead

NEW DELHI: India reported another 86,508 new coronavirus cases, but Prime Minister Narendra Modi sees little merit in imposing even short local lockdowns. India now has confirmed more than 5.7 million cases, the second-most in the world. The Health Ministry also said Thursday that 1,129 more peop Read More...

Trailblazing journalist Harold Evans dead at 92

Sir Harold Evans, a British-American editor whose 70-year career as a hard-driving investigative journalist, magazine founder, book publisher and author made him one of the most influential media figures of his generation, died on Wednesday at the age of 92. Evans died of congestive heart failure i Read More...

Traffic disrupted as landslides obstruct over dozen places along Prithvi Highway

DHADING: Landslides have occurred at different places along the Prithvi Highway due to incessant rain that has continued since Tuesday night. The vehicular movement along the highway has come to halt since the rain-triggered landslides have obstructed the road at more than 15 places including Hug Read More...

World leaders criticize haphazard response to pandemic

UNITED NATIONS: World leaders gathering remotely Wednesday criticized a haphazard global response to a microscopic virus that has unleashed economic havoc and taken nearly 1 million lives in its march across the globe. In the words of Kazakhstan’s president, it was “a critical collapse of global Read More...

Saudi king's rare address to UN showcases monarch in charge

DUBAI: Saudi Arabia’s King Salman made a rare address to the UN General Assembly on Wednesday, using the moment to highlight the foundational notions of his regime — his steadfast commitment to the Palestinians, his stature as custodian of Islam’s holiest sites and his assertion that Iran is r Read More...