Rastriya Banijya Bank introduces 8 new loan categories at only 3.33% interest rate, 2.33% for female entrepreneur; 8 applications already approved for loan

Mon, Jan 7, 2019 5:03 PM on Corporate,
Rastriya B...

Rastriya Banijya Bank (RBB) at a program today has officially launched 8 new loan categories with an interest subsidy of up to 5% and 6% for female entrepreneurs.

The seven loan products under RBB Interest Subsidy Loan include:

  • Commercial Agriculture and Livestock Loan – up to NPR. 5 crore
  • Educated Youth Self-Employment Loan – up to NPR. 7 Lakhs
  • Youth Returned from Foreign Employment Project Loan - up to NPR. 10 Lakhs
  • Business Loan to uplift under privilege community - up to NPR. 10 Lakhs
  • Higher and Technical or Commercial Education Loan - up to NPR. 5 Lakhs
  • Loan for Earthquake Victims for building their residence - up to NPR. 3 Lakhs
  • Mahila Udhyamshil Karja – up to NPR. 15 Lakhs

The Government of Nepal has introduced a directive whereby the government will provide interest subsidy or the borrowers of above-mentioned loans. Many commercial banks have introduced similar products, but RBB attracts more attention because of its minimal base rate.

Currently, the base rate of RBB is at 6.33% and adding a premium of only 2%, the total interest to be charged comes at 8.33%. Similarly, as the government has introduced subsidy plans, after deducting 5% the rates comes down to 3.33% only. This rate is even below the inflation rate of the country. In addition, the women entrepreneurs have been granted an additional 1% subsidy, availing them the loan at only 2.33%.

Speaking at the program, Kiran Kumar Shrestha, CEO of RBB said, "Currently, RBB is the largest bank in terms of branch network, deposits, and loans. We currently are present in 74 districts with a deposit base of Rs 182 arba and loan portfolio of Rs 128 arba. Despite that we are introducing these new categories to reach and serve the deprived sectors of our country. The policy was introduced in our Budget and we would like to contribute to it. We are doing it not as an obligation, but as an effort to contribute to Samriddha Nepal (Prosperous Nepal)."

The interest borrowers can apply for the loan from any branch of RBB all over the country. Once the proper assessment is done, the loan will be approved from RBB's head office in Kathmandu. The process is likely to take approximately 7 days, or longer if the field visit is required.

In the program, two of the approved borrowers were handed over the cheque. Mr. Bhim Prasad Adhikari has been approved for Educated Youth Self-Employment Loan of Rs 7 lakh. Sharing his experience Mr. Adhikari says, "I had already completed Bachelors but was unemployed. I wanted to join Army but couldn't make it and I decided to join the hospitality and management sector. After working at various places, I wanted to start something of my own. But I didn't have any money or land to put as collateral at the bank. After hearing of this provision in this budget, first I went to Nepal Bank and then to Nepal Investment Bank but had to face a lot of procedural hassles. Finally, I went to RBB's kalanki branch. I talked to the manager, asked him to visit the shutter I was renting and within a week I was told that the loan was approved. I'm still surprised actually."

Similarly, the second applicant was Ms. Rajani Haayu. She had applied for Higher and Technical or Commercial Education Loan to continue her engineering study. Along with these 8 other applicants have been already approved and many more in the pipeline. Mr Shrestha says, "We don't have any quota system yet, so we are inviting everyone who are in need of the money and we have the vigor and enthusiasm to do something and stand on their own feet."