Himal Press 
Monetary Policy, Mid-term Review, Business
KATHMANDU: The Nepal Rastra Bank (NRB) has introduced a series of credit facilitation and regulatory revisions through the mid-term review of its monetary policy for the fiscal year 2025/26, released on Tuesday.
The central bank has decided to retain the existing arrangements related to interest rate spreads, bank rate, mandatory cash balance, and statutory liquidity ratio.
In a bid to stimulate lending to productive sectors, NRB has said that it would expand the scope of sectors eligible under the existing loan limit framework. Loans extended to tourism, information technology, and export-based industries that utilise domestic raw materials will now be included within the prescribed credit limit for agriculture, energy, micro, cottage, and small enterprises.
The central bank has also said that it would revise provisions to ensure that banks and financial institutions maintain minimum sector-wise credit ratios.
Similarly, the NRB has said that it would amend the working capital loan guidelines to allow banks to determine the duration of Permanent Working Capital based on cash flow and financial analysis of borrowers. The existing provision requiring borrowers to reduce the outstanding amount of working capital loans to below 10% for at least seven consecutive days in a year will be increased to 30%.
Banks and financial institutions will be allowed to restructure or reschedule loans at a concessional interest rate of a minimum of 10% until mid-July 2026 for businesses displaced due to the expansion of the East-West Highway and the Mid-Hill Highway.
The central bank has also raised the ceiling on non-deliverable forward (NDF) transactions undertaken by banks and financial institutions to 30% of their core capital. Such a limit is 25% at present.
The NRB has said that it would facilitate foreign investment in infrastructure development projects, including data centres, cloud computing, robotics laboratories, and artificial intelligence. In addition, banks and financial institutions will be encouraged to provide consortium financing for such projects.
To further promote digital transactions, the central bank has said that it would adopt a strategy to gradually reduce check-based transactions and encourage electronic payment systems.
The central banks also said that borrowers unable to repay loans immediately due to situational constraints will not be automatically blacklisted.
The NRB has also said that it would implement, in phases, the responsibilities assigned to it under the recently approved Second Financial Sector Development Strategy endorsed by the government.
