KATHMANDU, NOV 26-2012
Borrowers defaulting on loans of as less as Rs one million will now be blacklisted by the Credit Information bureau (CIB).
Nepal Rastra Bank (NRB) issued a circular today saying that financial institutions should blacklist defaulted loans of Rs one million or more. According to the earlier regulation, the floor was fixed at Rs 2.5 million.
NRB’s move to reduce the blacklisting default amount will increase the number of people and firms listed in CIB’s blacklist. There are 2,691 borrowers that are in the CIB’s blacklist as of now. CIB blacklists borrowers within 15 days of a financial institution’s request.
Likewise, from now on, financial institutions need to provide CIB with details regarding all loans permitted by the financial institutions exceeding Rs one million in principle amount within 15 days. In addition, information about the loans that are not repaid within 90 days of the repayment deadline also needs to be provided to CIB within 15 days of the deadline. In this case too, earlier only loans amounting to Rs 2.5 million needed to be reported promptly to CIB.
Borrowers that have failed to pay the principle amount for more than one year of
the deadline, or were found to have misused the borrowed amount can be blacklisted by CIB. Likewise, borrowers not in contact or who are bankrupt will also get blacklisted.
Being blacklisted makes the borrower — any person or firm — ineligible for acquiring or rescheduling any new loan from any financial institution, not even credit card. Such blacklisted people cannot even become a guarantor for other loans. Moreover, such blacklisted people will also be ineligible to be a director of any publicly listed company.
Source: THT
Borrowers defaulting on loans of as less as Rs one million will now be blacklisted by the Credit Information bureau (CIB).
Nepal Rastra Bank (NRB) issued a circular today saying that financial institutions should blacklist defaulted loans of Rs one million or more. According to the earlier regulation, the floor was fixed at Rs 2.5 million.
NRB’s move to reduce the blacklisting default amount will increase the number of people and firms listed in CIB’s blacklist. There are 2,691 borrowers that are in the CIB’s blacklist as of now. CIB blacklists borrowers within 15 days of a financial institution’s request.
Likewise, from now on, financial institutions need to provide CIB with details regarding all loans permitted by the financial institutions exceeding Rs one million in principle amount within 15 days. In addition, information about the loans that are not repaid within 90 days of the repayment deadline also needs to be provided to CIB within 15 days of the deadline. In this case too, earlier only loans amounting to Rs 2.5 million needed to be reported promptly to CIB.
Borrowers that have failed to pay the principle amount for more than one year of
the deadline, or were found to have misused the borrowed amount can be blacklisted by CIB. Likewise, borrowers not in contact or who are bankrupt will also get blacklisted.
Being blacklisted makes the borrower — any person or firm — ineligible for acquiring or rescheduling any new loan from any financial institution, not even credit card. Such blacklisted people cannot even become a guarantor for other loans. Moreover, such blacklisted people will also be ineligible to be a director of any publicly listed company.
Source: THT
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