Speaking at an interaction on 'Nepal's Reconstruction Campaign' held in Kathmandu on Sunday, NBA Vice Chairman Anil Shah said NBA has already provided Rs 100 million to the PM Disaster Relief Fund as part of their Corporate Social Responsibility (CSR) and distributed relief material worth Rs 150 million to quake-hit people.Bankers have also requested Nepal Rastra Bank (NRB) to treat such lending as 'deprived sector lending'.
NBA has said that the amount set aside for concessional loans is 10 percent of the total lending made by its member banks. The association, however, has not unveiled interest rate of such loan.
Shah said banks would decide interest rates on their own.
Speaking at the program, Shovandev Pant, CEO of Lumbini Bank, said they can extend Rs 100,000 in concessional loan to each family which receives relief package worth Rs 200,000 announced by the government for families who lost their homes in the quake.
Bankers also have said that concessional loans of Rs 2.5 million for urban households and Rs 1.5 million for rural households announced by the government should have longer pay-back period. As repayment period for home loans currently stands at 20 years, repayment period for concessional loans should be longer than that, NBA officials said.
The government has announced plan to float home reconstruction loan to earthquake-hit people at just 2 percent interest rate.
"We will also provide additional financing for existing businesses that need increased working capital financing due to disruption of production, delays in collection, delays in receipt of raw materials, disruption in distribution, disruption in market access, decrease in sales, disruption and damage of end customers, due to the earthquake," NBA said in a statement.
According to NBA, commercial farmers, and micro, small and medium enterprises entrepreneurs can also get concessional loans to supplement their income due to disruption in their regular source of income or employment or for additional income required to manage funds for repair of homes due to the earthquake.
Commercial banks will assess the need for additional financing/refinancing, restructuring/rescheduling of loans, extension of repayment period, waiver of penal interest and decide the same for their clients based on their own discretion/judgment, according to NBA.
Banks will also consider restructuring/rescheduling of loans (in consultation with Nepal Rastra Bank for relaxation of provisioning requirement), including providing additional moratorium and extension of repayment period, for both personal borrowers as well as business borrowers whose income or cash flow or businesses have been adversely affected solely due to the earthquake.
NBA has also said that banks will consider waiving off penal interest of genuine borrowers with very good track record and who are unable to meet their loan repayment installment obligations solely due to the impact of earthquake.
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