NRB directs BFIs to provide 2% discount on interest to minimize the impact of COVID-19 on borrowers

Nepal Rastra Bank (NRB) has directed the banks and financial institutions to provide a two per cent discount on the interest rate to minimize the impact of COVID-19 on borrowers.

The country's central bank, through a notice on Tuesday, instructed the BFIs to provide the discount to the coronavirus affected entrepreneurs on the interest as of April 12.

NRB stated that the banks and financial institutions issuing loans henceforth have to reduce the interest by 2% and count the interest amount of the fourth trimester of the fiscal year 2019/2020.

However, the central bank said this provision does not apply in the case of food processing, sale and distribution; LPG bottling, sale and distribution; the internet service providers; telecom service providers; the television service providers; the tobacco and alcohol based industries; and the hydropower projects in operation.

Likewise, NRB has directed BFIs to make provisions for extending the time for payment of the monthly/trimester installments to be collected in the months of Baisakh and Jestha till the coming Ashar-end. The NRB directive states that no additional charges or fines can be levied in the case of such installments.

The central bank has stated that the timeline for payment of the principal and interest of short-term loans of all recurrent capital-type to be paid during the lockdown period could be extended by 60 days.

NRB Circular: