KATHMANDU, Dec 6:
Hydropower developers that have been pushing for soft loans and complaining of high lending rates at banks and financial institutions (BFIs), are finally being heeded.
Now they can get loans at 10 percent interest, announced Nepal Rastra Bank (NRB) on Monday.
Issuing fresh directives to the BFIs, the central bank said it is providing a refinance facility to commercial banks, development banks and finance companies at 6.5 percent, specially targeting the hydropower sector.
“And BFIs in turn should lend the amount to hydropower developers at an interest rate not exceeding 10 percent,” read the directives.
For this facility, the BFIs should approach the central bank with loan demands placed by the developers, technical details of the projects for which the loans are being sought and applications for refinance in a format specified by NRB.
Pre-conditions for pledging such facilities are: borrowers seeking the loans should not be blacklisted and the BFIs seeking refinance should have complied with the capital adequacy and other norms of the central bank.
Refinances would be provided against good loans only and the central bank said it would provide loan amounts of as much as 80 percent of the good loans or 60 percent of the core capital of the BFIs.
“Such refinance will be provided for hydropower projects of up to 25 megawatts (MWs) and the period will be six months,” read the directives.
The central bank has also tightened conditions for the zero-interest lending facility, which it announced last year to encourage BFIs to open branches in 30 remote districts with low penetration of banking services.
“Now the facility will not be provided for opening branches in areas adjoined major highways or village development committees and municipalities connected to major highways,” according to the directives.
Under the facility, the central bank has been providing interest-free loans of up to Rs 5 million to BFIs that open branches in district headquarters and up to Rs 10 million for opening branches outside the headquarters of 30 of the districts.
NRB on Monday also made it mandatory for BFIs to insure the deposits and loans issued under the deprived sector lending scheme.
Source: Republica
Hydropower developers that have been pushing for soft loans and complaining of high lending rates at banks and financial institutions (BFIs), are finally being heeded.
Now they can get loans at 10 percent interest, announced Nepal Rastra Bank (NRB) on Monday.
Issuing fresh directives to the BFIs, the central bank said it is providing a refinance facility to commercial banks, development banks and finance companies at 6.5 percent, specially targeting the hydropower sector.
“And BFIs in turn should lend the amount to hydropower developers at an interest rate not exceeding 10 percent,” read the directives.
For this facility, the BFIs should approach the central bank with loan demands placed by the developers, technical details of the projects for which the loans are being sought and applications for refinance in a format specified by NRB.
Pre-conditions for pledging such facilities are: borrowers seeking the loans should not be blacklisted and the BFIs seeking refinance should have complied with the capital adequacy and other norms of the central bank.
Refinances would be provided against good loans only and the central bank said it would provide loan amounts of as much as 80 percent of the good loans or 60 percent of the core capital of the BFIs.
“Such refinance will be provided for hydropower projects of up to 25 megawatts (MWs) and the period will be six months,” read the directives.
The central bank has also tightened conditions for the zero-interest lending facility, which it announced last year to encourage BFIs to open branches in 30 remote districts with low penetration of banking services.
“Now the facility will not be provided for opening branches in areas adjoined major highways or village development committees and municipalities connected to major highways,” according to the directives.
Under the facility, the central bank has been providing interest-free loans of up to Rs 5 million to BFIs that open branches in district headquarters and up to Rs 10 million for opening branches outside the headquarters of 30 of the districts.
NRB on Monday also made it mandatory for BFIs to insure the deposits and loans issued under the deprived sector lending scheme.
Source: Republica
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