KATHMANDU, Sept 10: Nepal Rastra Bank (NRB) has tightened loans that bank and financial institutions (BFIs) floated to their senior staff.
In its amendment to the Unified Directives to BFIs on Tuesday, NRB—the central bank—has introduced a new provision that will now bar BFIs to lend their officials at the senior management level except for some consumer loans.
The central bank's new measure to tighten loans to the senior employees is aimed at curbing disbursement of loans to the senior staff.
Revised interest rate corridor system introduced
According to the provision, officials at the senior management will not be allowed to borrow loans in their names except for some consumer loans. The central bank has defined the senior management officials as those who are up to two ranks below the chief executive officer of the respective bank.
However, these senior officials of the bank will not be restricted from acquiring consumer loans like education loans, hire purchase loans, home loans and other loans for household purposes.
The lending restriction was already in place for chief executive officers, board directors and most senior officials of any bank or financial institutions.
The Unified Directives include all circulars and latest amendments to any of those circulars that are enforceable for bank and financial institutions.
