Nepal | January 17, 2021

Rs 83.13bn approved for refinancing

Arpana Ale Magar
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A total of Rs 83.13 billion has been approved so far for refinancing.

The government had brought a concept of refinancing for the recovery of industries and businesses that were adversely affected by the COV- ID-19 pandemic.

According to the Nepal Rastra Bank (NRB), a total of Rs 83.13 billion under the refinancing facility has been approved till dare. Out of the total approved amount, only around Rs 22 billion has been released though. “Releasing the refinancing amount is underway.

Gradually all the amount approved for refinancing will be released,” said NRB Joint Spokesperson Narayan Pokhrel.

Out of the total approved amount, Rs 50.07 billion is towards bulk refinance. Bulk refinance includes the amount issued via 45 banks and financial institutions (BFIs) that NRB has assigned for refinancing.

Similarly, Rs 33.06 billion has been released via NRB towards client-wise refinance, where the clients directly applied at the NRB for the refinancing facility, informed Pokhrel.

“Refinancing process is running smoothly. We have recently sought applications for second phase of refinancing,” he said, “Except for a few that lacked all the required documents, most of the applications are being approved.”

He further said issuance of loans under the refinancing facility may be delayed as there are a large number of applications. He, however, claimed that the amount will be released as soon as possible.

He also urged the service-seekers to register their complaints at the central bank, if they have any, regarding the refinancing process.

“So far we have not received any complaints directly from the stakeholders. If there are any issues, we request them to contact us. We are gradually trying to manage everything,” he added.

Aiming at providing relief to COVID-19 affected industries and businesses, the NRB has brought a policy of providing loan at five per cent interest rate. According to the Refinancing Guidelines, loans that businesses acquire from BFIs and NRB will have a maximum maturity period of one year and such loans will not be renewed. Guidelines say NRB can float up to Rs 200 billion in refinancing loan in the market as per necessity.

Small and medium enterprises, industries that use domestic raw materials and those contributing to substitute import should also be given priority while disbursing such loans, as per the guidelines.

Though NRB itself had been mobilising refinancing fund, the guidelines state that 70 per cent resources of the refinancing fund will be mobilised through the BFIs.

A version of this article appears in print on January 14, 2021 of The Himalayan Times.

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