Pvt sector seeks grace period for loan repayment

KATHMANDU: The private sector representatives have urged the central bank to allow deferring loan repayment period to January 14, 2016 citing the ongoing Tarai protests and its repercussions on their businesses.

The request was made today when a delegation of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) led by its President Pashupati Murarka met Nepal Rastra Bank (NRB) Governor Chiranjibi Nepal to discuss the ongoing protests in the Tarai and the resultant inconveniences facing the industries.

The press statement issued by the federation quotes FNCCI President Murarka as stating that the protests in the plains, which have continued for the past month-and-a-half have crippled all activities, including transportation, business, import and export, manufacturing and education institutions. “This has forced revenue loss amounting to billions of rupees.”

Stating it not possible for industries and business houses to repay their outstanding dues to the banks and financial institutions because of the current situation in the Tarai, Murarka urged NRB to extend the time frame to submit principal and interest on short- and long-term loans, including trust receipt loan, short-term loan and demand loan, by an additional three months.

Earlier on June 24, the central bank had introduced a relief package for borrowers whose revenue sources had dried due to the earthquakes of April and May.

The package, among others, incorporated debt restructuring facility, deferment in credit payback period and prolonged grace period for loan repayment. This facility had allowed borrowers, who were supposed to make principal and interest payments by July 16, to prolong the repayment period to October 17.

During the meeting today, Governor Nepal said that the central bank too was keeping a close eye and was aware of the adverse effects of the Tarai turmoil on the business fraternity. He assured that NRB would provide possible support to the business houses and industries, taking into consideration the suggestions made by FNCCI.

The FNCCI delegation included FNCCI Senior Vice President Bhawani Rana, Vice Presidents Dinesh Shrestha and Shekhar Golchha and Chair of FNCCI’s Banking Committee Shankar Prasad Pandey, as per the statement.