Nepal Rastra Bank’s guidelines for the Commercial Banks taking loans from the foreign banks; See what the Banks have to follow
Nepal Rastra Bank has made it possible for the 28 commercial banks to reel in the investment from foreign banks in the form of loan. The commercial banks will be able to obtain loan equal to 25% of their existing core capital.
For the banks to utilize the loan facilities, the Rastra Bank has laid down certain criterias;
This provision is supposed to help the nation while in the current situation of shortage of funds in the market.
- The loan obtained from the foreign banks will be available to be invested in the infrastructural development sectors like hydropower, roads, tunnelway, airports etc. The amount may also be invested in the development of Tourism, Agriculture and Microfinance sectors.
- The banks fulfilling the minimum paid up capital limit of Rs 8 arba can utilize this facility.
- Such loans must be paid within minimum 1 year or a maximum period of 5 years.
- The amount generated from such loans will not be used for interbanking transactions of foreign currencies.
- Prior approval from Nepal Rastra Bank should be taken before utilizing this facility. After receiving the fund, the commercials bans should get the loan transaction audited from the Rastra Bank. The banks must also inform the Rastra Bank about the payment of principal and interest as soon as possible.
This provision is supposed to help the nation while in the current situation of shortage of funds in the market.
