Published On: May 25, 2023 08:45 PM NPT By: Republica | @RepublicaNepal
KATHMANDU, May 25: Nepal Rastra Bank (NRB) has enforced a rule to provide refinance facilities at subsidized rates to the poorly performing production, construction and wholesale and retail businesses.
Through revising the refinance working guideline, the NRB has implemented the rule that was announced in the third quarterly review of the monetary policy 2022/23. The NRB has considered providing special refinancing facilities to the businesses that faced negative growth for two consecutive quarters. The limit of the refinancing amount has been fixed at Rs 6 billion. “However, the loans issued for import-based businesses activities will not be eligible to receive the special refinance facilities,” reads the NRB guideline.
The central bank has announced to provide restructure and reschedule facilities to loans of up to Rs 50 million until mid-July 2024. However, the provision is applicable only to the businesses related to hotels and restaurants, livestock farming and construction work.
But now the central bank has decided to provide the facilities to the poorly performing businesses citing the ongoing recession in the economy. Nepal faced a growth rate of a negative of 1.1 percent in the second quarter (between mid-October 2022 and mid-January 2023). Furthermore, the National Statistics Office (NSO) has projected that the country’s economic growth rate will be just 2.16 percent in the current fiscal year, almost four times lower than the government’s target.
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