KATHMANDU, July 9: The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has sought the deferral of loan repayment to banks and financial institutions (BFIs) until the economy returns to normality.
Issuing a statement on Wednesday, the FNCCI has urged Nepal Rastra Bank to extend the deadline for industries and businesses to repay their principal and interest of all loans from Chaitra (mid April) until the economy of the country gets back on track.
The umbrella organization of private businesses and industries of the country has also taken exception to the repeated follow-ups by banks during this adverse situation to recover their loans. It has said that industries and businesses have been suffering from such pressure from banks and financial institutions.
The FNCCI’s statement seeking a moratorium on the loan repayment for businesses and industries comes at a time when the NRB is formulating its monetary policy for the upcoming fiscal year 2020/21 that starts from July 16.
While the central bank has already issued a directive for BFIs to provide a holiday on all loan repayments as a relief to borrowers battered by COVID-19 and the ongoing lockdown, FNCCI said that some BFIs have been following up with many businesses and industries to recover interest and principal even during this period.
The relaxation that is due to expire in mid-July is likely to get extended.
The FNCCI has asked the central bank to extend this holiday until this crisis caused by the pandemic is over.
In an interview with Republica last week, NRB Governor Maha Prasad Adhikari said that the central bank will extend such moratorium.
“With the end of this moratorium, it would be difficult for borrowers to repay their all deferred installments at once. So we will extend the repayment holiday after it expires in mid-July,” NRB Governor Adhikari told Republica. “We will extend the repayment deadline by six months, nine months or 12 months, based on the impact on income or cash flow of borrowers or for the time it takes for the revival. We do not believe that borrowers should repay the loans within the deadline even when their businesses are shuttered,” he added.
The central bank is likely to announce the extension of the loan repayment holiday through its monetary policy that it plans to unveil next week.
Similarly, the FNCCI has also asked the central bank to provide businesses an opportunity of loan restructuring and rescheduling.