In some respite for the coronavirus-affected borrowers, the central bank has instructed the banks and financial institutions (BFIs) not to slap any penalty or additional fees while recovering loans during the prohibitory order put in place to curb the spread of the second wave of the contagion.

In its third quarter review of the Monetary Policy for the current fiscal year, the Nepal Rastra Bank (NRB) has also barred BFIs from publishing any sort of auction or debt collection notice not just during the prohibitory order period but for one month after the restrictions are lifted.

The NRB has also stated that the BFIs should make arrangements so that the funds that BFIs have set aside for their corporate social responsibility (CSR) activities can be used for fighting the pandemic, such as in purchasing oxygen cylinders, medicines, oxygen concentrator, among others.

Similarly, the central bank has also announced of special refinancing loan facility of up to Rs 500 million for hospitals and industries that want to establish liquid oxygen plants and up to Rs 200 million refinancing loan facility for hospitals and industries setting up oxygen plants. The maturity period of such loans will be one year.

The NRB has also urged the BFIs to offer concessions to borrowers who pay their instalments or interests within the prohibitory period. It has also directed the BFIs to immediately inform customers about the change in the interest rate on deposits and loans through electronic media.

The central bank has also directed BFIs to digitally update the 'Know Your Customer' form of customers whose accounts have been frozen and reactivate such accounts.

Meanwhile, the central bank has stated that the country is unlikely to achieve the initial growth target of four per cent for the ongoing fiscal year. "Even as the economy was gradually recovering after the first lockdown, the second wave of the pandemic and the various measures taken to contain its spread is certain to hit the projected growth target," the NRB has said.

A version of this article appears in the print on May 19, 2021, of The Himalayan Times.