Nepal Rastra Bank Introduces Draft Of Refinancing Procedure
June 3, 2020 | Investopaper
Nepal Rastra Bank has brought the draft of refinancing procedure, 2077, with the provision of refinancing up to Rs. 1.5 million for small, micro and domestic small enterprises. The central bank has come up with the procedure with the aim of effectively reviving the enterprise business by minimizing the impact of the corona virus on the country’s economy.
The bank has made arrangements to take three types of refinancing, micro, home and small enterprises, special and general. For small, home and small enterprises, the central bank will provide loans to banks and financial institutions at an interest rate of two percent. Banks and financial institutions will be able to disburse such loans at five percent interest. NRB will provide such special refinancing on one percent interest. BFIs will be able to charge three percent interest on that amount. NRB will provide ordinary refinancing on three percent interest rate. Banks and financial institutions will be able to invest such amount with interest up to five percent.
As per the instructions of NRB, banks and financial institutions will call for loans. The customer will have to apply to the concerned branch of the bank along with the prescribed documents. The refinancing decision will be made within one month of receiving the application. Only five customers of the bank’s each branch will be able to avail such loan facility.
Similarly, those industries which have good operating condition or are generating an average annual return of 20 percent or more in the last three years will not get such loan. Loans to cigarette, cigar, tobacco, khaini, gutkha and other tobacco related industries and liquor and liquor related industries will also be disqualified.
Suggested Readings:
What Is Refinancing? How One Can Receive Refinancing Facility In Nepal?