Govt tells banks to halt recovery of loans from businesses impacted by COVID-19 until mid-April

Published On: March 26, 2020 05:30 AM NPT By: Sagar Ghimire  | @sagarghi

KATHMANDU, March 25: Banks and financial institutions (BFIs) will now halt the recovery of loan installment until mid-April (Chaitra end).

A meeting of high-level financial sector management committee headed by Minister for Finance Yuba Raj Khatiwada held on Wednesday took a number of decisions as part of financial sector responses to the COVID-19 pandemic.

As the Nepal Rastra Bank is also involved in the high-level committee, the central bank will now issue a directive to all BFIs to implement this decision which aims to provide relief to businesses who are worried about getting default on the scheduled quarterly payment of loans due by mid-April.

This decision means businesses hit by COVID-19 will not have to worry about the repayment of their loans until mid-April (Chaitra end).

However, the government has not defined what COVID-19 impacted business means. As almost all businesses have faced the impact of the pandemic, all of them could be eligible for the loan repayment deadline relaxation. This is possibly the first relief measure from the government for the private sector or businesses affected by the pandemic.

Earlier last week, the Federation of Nepalese Chambers of Commerce and Industry sought as an extension of loan repayment and tax filing deadline by three months.

However, the government has not taken any decision about the deadline extension of tax filing that is due by mid-April (Chaitra end).

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