BFIs to have increased investable funds; Subsidized loans not to be included in calculation of CCD Ratio

Nepal Rastra Bank will not be including the subsidized loans in the calculation of CCD ratio. Previously, all the loans floated through the banks and financial institutions were considered in the calculation of CCD.

Reviewing the first quarter performance of the Moneatry Policy 2075/76, the Rastra Bank has decided not to consider such loans for CCD ratio. The central Bank has taken the step to control the problem of lack of investable funds in the financial institutions.

Currently, most of the banks have reported their CCD ratio at 79% due to which they were not able to make further investments. However, with the decision of the Rastra Bank, the CCD ratio is likely to decrease allowing the banks to increase their investments.
The bank has also addressed many issues through the circular.

Seeing the current condition, necessary changes will also be made in the Interest rate corridor whereas no changes have been planned for Compulsory Cash Reserve Ratio.
Rastra Bank had announced subsidised loans for Educated youths, youths returned from foreign employment, Women, Dalit community, agriculture and such. Along with these, the students can also enjoy subsidized loans upto Rs 7 lakhs by mortgaging the educational certificate.

Moreover, Rastra Bank has directed the banks to provide the subsidized loans as quick as possible. The banks have to answer within 21 days of application about the ability or disability of the applicant to receive such loans.