Exporters seek a year to pay refinance loans
KATHMANDU, JUNE 24:
Exporters are once again facing a tough time due to the limited payback time for loans granted by the central bank under the refinance facility. Though Nepal Rastra Bank (NRB) had simplified refinance facility for exporters last year, they are still finding it difficult to repay the loan within the payback time fixed by the central bank.
NRB has fixed a payback period of six months to clear loans granted by commercial banks but exporters have said that six months is insufficient to clear any loan. According to NRB, an exporter cannot receive another refinance facility until it clears its previous loan.
The loan payback period for an individual exporter and export-oriented industries are different, it states. Refinance loan for an individual exporter is available with a payback period of six months, whereas for an export-based industry the payback period is six months with an added adjustment of a few more months, if required, which depends on the previous loan settlement.
However, president of Nepal Pashmina Industries Association Pushpa Man Shrestha said that the loan payback time needs to be revised, as it is not viable to pay a loan within six months. “The payback time is short and not feasible for us, thus, the government should allow multiple refinance facilities for multiple contracts made by exporters and payback should be at least a year,” he said.
NRB has simplified most of the refinance procedures and is still planning to develop a new working procedure. However, exporters have said that there has been no further effort made to revise some of the complications in the refinance facility, which have created hassles during exports.
NRB had earlier mentioned that it would organise a meeting with representatives from Nepal Bankers’ Association, Ministry of Commerce and Supplies and exporters associations to interact about the refinance facility. NRB said exporters can easily receive the facility as soon as the commercial bank forwards the request to NRB.
Source: THT
