Kathmandu, December 23

Utilisation of the refinancing facility provided by Nepal Rastra Bank (NRB) increased in the first quarter of this fiscal to Rs 2.54 billion as compared to Rs 1.39 billion in the corresponding period of the previous fiscal, according to the first quarter review of the Monetary Policy 2016-17.

Under this refinancing scheme of four per cent interest rate, banks and financial institutions (BFIs) were asked to issue loans for the construction of well-facilitated tourist standard hotels in the tourist potential areas of the country namely, Pathibhara, Maipokhari, Halesi, Langtang, Sworgadwari, Upper Mustang, Gadhimai, Janakpurdham, Rara and Khaptad.

However, there has been dismal progress with regard to issuing loans to the earthquake-affected households at two per cent interest and only 12 banks have issued Rs 153.8 million credit in the review period.

The central bank had executed concessional home loan scheme since June 2015 but BFIs have floated nominal loans under this facility.

The first quarter review of the monetary policy has said that commercial banks have floated loans worth Rs 240.89 billion in productive sector, namely commercial agriculture, tourism, energy and small and medium enterprises (SMEs).

The total loan floated to the productive sector accounts for 16.3 per cent of the total loan portfolio of the commercial banks. Such loans accounted for 15.8 per cent of the total loan portfolio of commercial banks in the corresponding period of the previous fiscal.

While the monetary policy of this fiscal had instructed commercial banks to directly lend two per cent to the deprived sector by the end of this fiscal, commercial banks have lent 1.2 per cent or Rs 15.3 billion to the sector in the first quarter.

As per the provision of the central bank, commercial banks need to lend 1.25 per cent in first quarter then gradually increase the lending level in subsequent quarters — 1.5 per cent till second quarter, 1.75 per cent till third quarter and two per cent till last quarter of fiscal 2016-17. Commercial banks have total portfolio of Rs 72 billion in deprived sector lending. As per the central bank’s provision, commercial banks have to allocate five per cent of the total loan portfolio in deprived sector.