KATHMANDU, March 18: Nepal Rastra Bank (NRB) has made it compulsory for 'D' class micro-finance development banks to become the member of Credit Information Bureau (CIB).
The new regulation aims to make information about loan defaulters available to and from CIB and avoid duplication of loans among bank and financial institutions (BFIs), according to the circular issued by the central bank to micro finance development banks on Wednesday.
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Though 'A', 'B' and 'C' class BFIs were required to become members of CIB to share information about borrowers and loan defaulters, there was not any compulsion for the 'D' class micro-finance development banks to share such information.
The central regulatory bank has asked micro-finance development banks to share information about loans of Rs 50,000 or more with CIB. It means that the micro-finance development banks will now have to share information of borrowers acquiring loan amount of Rs 50,000 or more with CIB within 15 days of the sanctioning of loans.
The banks are also required to furnish status of such loans within 15 days of the end of each quarter until the loans are paid back. Similarly, micro-finance development banks should acquire information from CIB about the borrowers before approving loans of Rs 50,000 or more, according to the new requirement.
"CIB should provide information about prospective borrowers to the lenders within three days of the receiving of application. The bureau can provide such information to the banks via online service," reads the circular.
The fee for the credit information shall be fixed by CIB in coordination with Nepal Micro-finance Bankers Association, the circular added. NRB has also said that CIB could make inspection on whether micro-finance development banks are sharing credit information and acquiring information from CIB before sanctioning the loans to borrowers.
"The CIB should submit its inspection report to the Micro-Finance Promotion and Supervision Department of the NRB," read the circular.
NRB has also instructed the micro-finance development banks to designate a focal person in the bank to deal with credit information.
Project-hit locals to get loans for buying shares
KATHMANDU, March 19 : Here is good news for cash strapped locals of hydropower project affected areas.
A new circular issued by the central bank will make BFIs more eager to extend loans to locals of project affected areas to purchase shares allocated by hydropower companies. Following complaints from the locals regarding BFIs' reluctance to float loans to buy shares, Nepal Rastra Bank (NRB) has allowed BFIs to count such loans up to Rs 50,000 as their 'deprived sector lending'.
According to existing rules, 'A', 'B' and 'C' class BFIs are required to extend 4.5 percent, 4 percent and 3.5 percent of the total loans to the 'deprived sector' which includes women, indigenous nationalities, blind, deaf, handicapped, marginalized, laborers, artists and landless people who have low income and are socially backward.
The decision has come at a time when many locals of Dolakha are finding it difficult to purchase 'lucrative' shares of Upper Tamakoshi Hydropower Project Ltd (UTKHPL). BFIs, which are facing difficulty to meet the requirement of deprived sector lending, will be eager to float shares as this will also be an opportunity to calculate it into the deprived sector lending portfolio.
