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ECONOMY

NRB implements flexible policy to manage pressure on capital funds

KATHMANDU, July 26: Nepal Rastra Bank (NRB) has implemented flexible measures through the monetary policy of the cur...
By Republica

KATHMANDU, July 26: Nepal Rastra Bank (NRB) has implemented flexible measures through the monetary policy of the current fiscal year 2024/25 to manage the pressure on the capital funds of banks and financial institutions (BFIs). As part of this initiative, the NRB has introduced a policy to promote the use of capital fund instruments and new instruments.


As per the monetary policy, the existing loan loss provisioning requirement of 1.20 percent has been reduced to 1.10 per cent. Additionally, the NRB has indicated that a necessary review will be conducted regarding the risk-weighted arrangements for the purchase and sale of loans.


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The NRB has also raised the limit of the existing Regulatory Retail Portfolio (RRP) from Rs 20 million to a maximum of Rs 25 million.


Furthermore, banks and financial institutions will be able to consider suitable reserve amounts in the Regulatory Reserve as Tier-2 Capital when calculating their Tier-2 Capital, following the provisions of the Capital Adequacy Framework-2015. 


 

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