Electronic cheques from mid-July

KATHMANDU, Feb 4

Central bank has postponed making electronically readable cheques mandatory for the second time.

Issuing a circular, Nepal Rastra Bank (NRB) has directed the financial institutions to issue electronically readable cheques by the end of current fiscal year. Back in October, NRB had directed the banks to circulate such machine-readable cheques by mid-January, 2014. Moreover, in April 2013, central bank had fixed mid-July, 2013 as the cut-off period.

However, the provision is only mandatory for the financial institutions that are availing electronic cheque clearance service from Nepal Clearing House Ltd (NCHL). To make the cheques compatible for electronic clearing, financial institutions have to issue cheques according to Cheques Standards and Specifications Guidelines 2011.

The central bank has been postponing the cut-off date since past one year due to financial institutions’ inability to replace the existing cheques with standard ones.

The standard cheques will have a character recognition technology that will help facilitate the processing of cheques and will have the routing number and account number at the bottom of a cheque.

Nepal Clearing House started electronically clearing Nepali currency cheques from April 2012. The clearing house, established in 2009 in association with Nepal Bankers’ Association, Nepal Rastra Bank (NRB) and other financial institutions, has started Automatic Check Truncation and clearing systems with the current normal cheques.

Source: THT

Central bank enforces new CRR‚ SLR provisions

Central bank enforces new CRR‚ SLR provisions

KATHMANDU, JULY 29: 

Banks and financial institutions in the country now have more funds to invest or extend as credit, as the changes in Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) introduced through the latest Monetary Policy came into effect from today.

The latest monetary policy introduced by Nepal Rastra Bank (NRB) had slashed CRR to five per cent for commercial banks, 4.5 per cent for development banks and four per cent for finance companies to promote lending. Likewise, SLR has been reduced to 12 per cent for commercial banks, nine per cent for development banks and eight per cent for finance companies. Class ‘B’ and ‘C’ financial institutions that do not collect call deposits have to maintain SLR of six per cent.

CRR refers to the portion of total deposits that financial institutions have to keep at central bank as deposit. SLR is the portion of total deposits that financial institutions have to maintain as liquid assets such as cash, government securities and precious metals. Reduction in SLR and CRR has freed some funds of banks and financial institutions for lending and investment.

As for deprived sector lending, financial institutions can increase their exposure by 0.25 percentage point within mid-January 2014 and another 0.25 percentage point by the end of the current fiscal year to meet the central bank’s requirement, says an NRB circular issued on Sunday.

The monetary policy has made it mandatory for commercial banks to extend amount equivalent to at least 4.5 per cent of total loans to the deprived sector. The ratio for development banks and finance companies stands at four per cent and 3.5 per cent, respectively.

The same circular also extended the period for reverse repo and repo auctions to 21 days from existing 28 days.

Moreover, it has also imposed new refinancing rate for priority sectors. Ordinary refinancing rate for productive sector loans such as hydro, agro, infrastructure and productive sector is fixed at five per cent for which banks can charge up to nine per cent interest. The rate for export refinancing has also been fixed at one per cent and financial institutions can charge up to 4.5 per cent.

Likewise, NRB has fixed special refinancing rate for sick industries and SMEs, among others, at 1.5 per cent and has allowed banks to extend such loans at 4.5 per cent interest.

Source: THT

RBB, NIDC begin work to sell NIBL, Nabil cross-holdings

KATHMANDU, JUN 08 - 2013

Rastriya Banijya Bank and Nepal Industrial Development Corporation (NIDC) have started an initiative to sell their cross-holdings in Nepal Investment Bank and Nabil Bank respectively. The RBB has a total of 4.51 million units of promoter shares at the NIBL, while the NIDC has 1.24 million such shares at Nabil Bank.

Although private sector banks and financial institutions have already ended their cross-holding, these banks are yet to end theirs as per the central bank’s directive.

RBB CEO Krishna Prasad Sharma said the largest bank has formed a committee to determine the value of its promoter shares that remain in the Nepal Investment Bank Limited (NIBL).

“A team headed by a board director will determine the value soon and we plan to start selling our shares in the NIBL within this fiscal,” Sharma said.

On the other hand, a senior official of the NIDC said they are planning to issue a notice to sell their cross-holding at Nabil. “We have already sold 300,000 units of shares through auction in two phases,” said the NIDC official.

The central bank had directed banks and financial institutions to end cross-holdings as cross interest would prevent a competitive environment in the banking sector.

The NRB spokesperson said the central bank has asked them to end their cross-holdings as soon as possible. “They also cannot distribute dividend as per the central bank directive,” he said. However, the NIDC official said the NRB has exempted them from the dividend as it has continued selling the cross-holdings. “All the shares were not sold in the earlier attempts,” the official said.

In the case of RBB , it backtracked from selling its shares in the NIBL four years ago after the Securities Board of Nepal (SEBON) rejected the price it quoted. The RBB had quoted Rs 1,068 per share and SEBON had said that it was unjustifiable. At that time, the value of an ordinary share of the NIBL was around Rs 1,900.

Later, as the share prices plunged due to recession in the stock market, the RBB did not make an effort to sell its shares.

The value of NIBL’s public share was worth Rs 724 on Friday, which means that the RBB is likely to get far less than what it could have got four years ago. Usually, the value of promoter shares is kept less as compared to public shares.

Source: The Kathmandu Post

Central bank says it is ready to help real estate sector

KATHMANDU, MAY 05 - 2013

Nepal Rastra Bank Deputy Governor Maha Prasad Adhikari said on Saturday the central bank is ready to facilitate real estate projects if they came under the category of sick industries.

Addressing a seminar “Urbanization and Existing Real-Estate Scenario, Policy Required for Growth” at the ongoing NLHDA Kantipur Real Estate Expo 2013 in the Capital, Adhikari said the central bank will facilitate realty projects with incentives like refinancing, if required. “This is a production-oriented sector. The central bank is ready to help the sector steer clear of the current obstacles,” he said.

The NRB has been saying that it will facilitate any settlement on loan defaults by real estate entrepreneurs due to problems in their projects, if the banks concerned provide credible framework on the settlement.

Adhikari said banks still can make additional lending in the sector although the central bank has imposed a cap on realty lending at 25 percent of their total investment portfolio. “Exposure of banks to this sector stands at just 14 percent. Therefore, additional loans amounting to 11 percent of their portfolio can be extended to this sector,” he said.

Adhikari, however, made it clear that the central bank would not raise the lending threshold of 60 percent of the market value of the collateral. “Making excessive lending in this sector can be counter-productive,” he said. Housing developers have been demanding that the threshold be hiked.

Joint secretary of the Ministry of Urban Development Suresh Prasad Acharya said developers have focused more on urban areas. He said the government is coming up with directives to better manage the real-estate business. “We don’t see developers focusing on infrastructure development and coming up with projects in the rural areas,” he said, adding the business has been concentrated more on those having higher and upper-medium earnings. He said developers should cater to the demand of commoners and build properties accordingly.

Vice-president of Nepal Bankers Association Upendra Poudel said the negative psyche of the people about the real-estate sector has hit the development of the sector. “This has lowered the confidence of developers,” he said.

Poudel said the ceiling on realty lending imposed by the central bank has helped the industry gradually bounce back. “If you see in terms of end-users, there is a battle among banks to offer home loans. However, lending to projects is still on the lower side,” he said. “Banks don’t have many areas to invest. Once developers start earning trust, we will happily increase our exposure to the sector.”

Poudel also said real estate companies should increase their focus on mid-level income individuals. He highlighted the possibility of offering loans at low interest rates to first-time home buyers or by exempting taxes. “Various countries, including India, have adopted this policy,” he said.

Padma Sundar Joshi, country director of UN Habitat, said urbanisation in Nepal has reached 25 percent, which suggests the need for housing projects. “However, developers have failed to address the demand of medium-class people, which accounts for almost 70 percent of the total population,” said Joshi.

He said as 58 percent of Kathmandu’s population resides in rented homes, developers should consider this group as their prospective buyers. “The demand for homes for around 300,000 families in Kathmandu hasn’t been fulfilled,” he said.

Surya Bhakta Sangachhe, senior technical advisor of Nepal Society of Earthquake Technology (NSET), said 70 percent of the houses in Kathmandu may collapse if a major earthquake hits the valley. “On top of that, there isn’t access for ambulance or fire fighters to around 30 percent of the houses. Hence, the government, as well as private sector, should increase their focus on the issue,” said Sangachhe, adding a 10 percent increase in the budget to build a house will make it earthquake-resistant.

General Secretary of Nepalese Architect Society Devesh Bhattarai said the major problem of the sector is property prices. Properties are being priced only focusing on high-end customers. “The sector was further hit by those purchasing properties for making investment, further detaching the access of the middle class families,” said Bhattarai. He added the government should provide the private sector with abundant land on lease for a long duration to encourage planned urbanisation.

Developers highlighted the need for a long-term plan to reduce the possible negative outcome of unplanned urbanisation. “Kathmandu can be a ‘Slum Capital’ if we don’t think in time,” Om Rajbhandary, third vice president of NLHDA said presenting a paper. “There is a need for reducing risks in places with old structures and arranging new rescinding destination for the growing population.”

He also said the land use policy should be implemented and there should be participation of the private sector in land pooling.

Rajbhandary said there are both buyers and in the market, but there hasn’t been much transaction due to the lack of confidence.

“For this, the central bank should exempt capital gain tax for a certain period,” he said. “There is also a need for refinancing projects which have not been able to complete.”

NLHDA President Iccha Raj Tamang said developers have already shifted their focus on moderate-cost projects due to the market demand. “The ongoing expo too shows the routes we have taken. Prices of apartments and houses have come down from the range of Rs 20-40 million to around Rs 10 million,” said Tamang.

He urged developers to reduce the margin on properties, for making the business sustainable. “Realty business lasts for hundreds of years. Developers should lower profit margins to around five percent or less,” he said, stressing on the need for a change in government norms for reducing the cost of housing projects.

Source: The Kathmandu Post

NRB hikes capital charge to mitigate operational risk

KATHMANDU, APR 27 - 2013

The central bank has hiked the capital charge of banks and financial institutions to mitigate growing operational risks.

As most banks and financial institutions have been exposed to operational risks lately, the additional capital charge will help mitigate the risk, Nepal Rastra Bank (NRB) said today.

Updating the supervisory adjustments in risk weighted assets and capital of Capital Adequacy Framework, 2007, under the unified directives of banks and financial institutions, Nepal Rastra Bank said that

if banks do not adopt sound practices to manage operational risks, they shall be levied an additional capital charge of two per cent to five per cent of gross income of the immediate previous financial year for operational risks.

Operational risk losses have often led to the downfall of financial institutions globally also. According to Basel II, operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.

Likewise, the central bank has asked class ‘B’ and ‘C’ financial institutions to also increase their risk weighted assets to mitigate operational risks in a phasewise manner.

Development banks and finance companies have to add two per cent by the end of the current fiscal year 2012-13, four per cent by the end of next fiscal year 2013-14, and five per cent by the end of fiscal year 2014-15, additional capital charge in their risk weighted assets.

Lately, banks and financial institutions have been undergoing a sea change and facing an environment marked by growing consolidation, rising customer expectations, increasing regulatory requirements, proliferating financial engineering, enhanced technological innovation and mounting competition, which has also increased the probability of failures or mistakes from the operations point of view, resulting in increased focus on managing operational risks.

A key component of risk management is measuring the size and scope of the firm’s risk exposures, though there is no clearly established, single way to measure operational risk on a firm-wide basis.

But the central bank’s move could help banks and financial institutions adopt sound practices to manage operational risks.

Source: THT

Credit to agriculture sector surges 60pc

Credit to agriculture sector surges 60pc

KATHMANDU, JUL 29 - 2012

After seeing virtually no growth in agriculture lending in previous five years, commercial banks’ credit to agriculture sector swelled in the last fiscal year 2011-12, a central bank data shows.

According to the Nepal Rastra Bank (NRB), commercial banks’ lending to the sector increased by 60 percent to Rs 22.70 billion over the first 11 months of the last fiscal year against the same period previous year. The size of the loan in the sector rose by Rs 10.66 billion during the period.

The central bank said that the positive outcome is being seen of the government’s policy to encourage banks and financial institutions (BFIs) to increase lending in the sector like agriculture and energy. The central bank have made the mandatory provision that the BFIs must lend 10 percent of the total lending to agriculture and energy sectors since last fiscal year.

NRB Deputy Governor Maha Prasad Adhikari claimed that it was the indication that the central bank’s policy started to deliver the result. “Increasing trend of commercial farming in the recent years, setback in real estate and shares, and tendency of people to take loans from BFIs are other reasons behind increased lending in the agriculture sector this year,” he said.

According NRB data, there was a growth of 122.5 percent in lending in forestry, fishery, farming and slaughter, while animal farming and services witnessed a growth of 17.1 percent in the first 11 months last year. Even the lending in agriculture related machineries which is not categorised as agriculture sector loan, also witnessed a staggering growth of 284 percent in the review period last fiscal year.

Bankers also admit that central bank’s policy encouraged investment in agriculture. “Although I am suspicious the data about the growth of lending it is really positive indicator,” said Sashin Joshi, chief executive officer of NIC Bank.

He said that there has been emergence of new types of commercial faming over the last 2-3 years, which also triggered increased demands for loans in the sector.

Rastriya Banijya Bank is now planning to a substantial increase agriculture loan this fiscal year after seeing rise in loan demands from the sector.

According to Krishna Prasad Sharma, CEO of the country’s largest bank, increased trend of commercial farming in both plants and livestock in the recent days triggered loan demands from the sector.

“That’s why, we have planned to increase lending in the sector by Rs 2 billion this year,” he said, adding that the bank would also invest in agriculture production and marketing.

Source: The Kathmandu Post

Petroleum products, gold top import list

KATHMANDU, JULY 27, 2012

Petroleum products and gold top the list of the country’s import bill. The top five imports also include MS billet, vehicles and spare parts, and crude soybean oil, according to the central bank’s data.

The country has imported Rs 419.57 billion worth merchandise till mid-June and of the top five imports, three are from India and two from third countries.

“Of the total imports of Rs 272.26 billion from India, petroleum products is the largest import followed by MS billet — that is used for TMT bars — and vehicles and spare parts,” the central bank’s data revealed, adding that the country imported Rs 84.45 billion worth petroleum products in 11 months, followed by

Rs 17.08 billion worth MS billet and Rs 15.75 billion worth vehicles and spare parts from India.

Similarly, of the total Rs 147.31 billion imports from third countries, gold is the largest import followed by crude soybean oil.

“The country paid Rs 22.82 billion for the second largest import, the precious yellow metal,” it stated, adding that it paid Rs 9.42 billion to import crude soybean oil from third countries.

However, the import bill of petroleum products has doubled in the last two years due to increasing consumption in the domestic market and also due to the increase in prices in the international market. But the import of gold has slowed down in the last two years.

In the 11 months of fiscal year 2009-10, the country had imported Rs 46 billion worth petroleum products, whereas it has almost doubled in the same period of last fiscal year 2011-12 to Rs 84.45 billion. But the country had witnessed an import of Rs 39.40 billion worth gold in the 11 months of fiscal year 2009-10, which has come down to Rs 22.82 billion in the same period of the last fiscal year, the data revealed.

Similarly, the import of vehicles and spare parts has also come down in the last two years to Rs 15.75 billion from 2009-10’s mid-June import of Rs 21.56 billion, whereas MS billet has seen a gradual growth in imports in the last two years.

But the import of crude soybean oil has increased almost by three times to Rs 9.42 billion from 2009-10’s mid-June of Rs 3.55 billion.

The combined import bill of the top five merchandise totals Rs 149.52 billion but the total export bill of the country is Rs 67.21 billion — by the 11 months of the last fiscal year 2011-12 — that is not enough to pay the import bill of a single product — petroleum products — from India.

 

 

Source: THT

NRB mulls interest rate corridor

KATHMANDU, July 4, 2012

The formulation of an interest rate corridor by the central bank is expected to do away with the bipolar spikes in the short-term interest rate.

The central bank is preparing a mechanism to formulate an interest rate corridor from the coming fiscal year as an additional monetary instrument of the monetary policy in order to handle short-term interest rate volatility.

“Nepal Rastra Bank (NRB) is working on preparing the mechanism for interest rate corridor which will symbolically determine the ceiling and floor for the interest rate,” according to the spokesperson for the central bank Bhaskar Mani Gyanwali.

In recent times, the domestic financial market has witnessed short-term interest rate skimming to an all time low following liquidity flush after going through a period of high interest rate.

The interest rate of treasury bills, being used as repo instrument and inter-bank lending rate indicate the movement of short-term rates. A 91-day treasury bill that was traded at 9.6 per cent in early 2010 has reached 0.9 per cent.

Likewise, inter-bank rate which had reached 14 per cent in 2010, has slipped below one per cent since December 2011 and rarely rose above the level. “Formulating an interest rate corridor is expected to counter such volatility and help form a tentative interest band that will more or less guide the interest rate movement of the money market,” added NRB spokesperson Gyanwali.

The central bank will indicate the interest band by determining the maximum rate at which the central bank will sell securities and minimum rate at which it will purchase securities. The movement of the short-term interest rate will take place between the two extremes.

At present, the central bank does not directly dictate the interest rate in the money market but uses its repo and reverse repo rate to guide the interest rate which now seems to be ineffective as interest rate for lending is still higher than 15 per cent in spite of treasury bills being traded at less than one per cent.”

There are not enough instruments to invest surplus funds amounting up to 25 per cent of the deposits, while the yield of government securities such as treasury bills is almost non-existent, that is why banks are unable to reduce lending rates,” said vice president of Nepal Bankers’ Association Upendra Paudyal, who is also the chief executive of NMB Bank.

Banks are compensating their cost of deposit collection by continuing with higher lending rate due to painfully low inter-bank and treasury bills rate. Both higher and lower short-term interest victimises the borrowers alike.

“If the central bank formulates an interest rate corridor, banks will be guaranteed a certain level of yield on securities, and both depositors and borrowers will get a better rate that is why we have been advocating for an interest rate corridor,” added Paudyal.

The profits of the banks have shrunk due to increased interest cost and the absence of projects to finance, and limited and low yielding avenues for alternative investment.


Source: THT

Branchless Banking Service : Central bank against service fees on deposit collection

KATHMANDU, MAR 19 -

The Nepal Rastra Bank (NRB) will not allow banks to charge customers service fees on deposits collected through point of transaction (POT) machines—a type of branchless banking service.

The central bank’s decision came after some banks sought its approval to charge customers on deposits and withdrawals carried out through POT machines. However, the NRB has said nothing about the charges on withdrawals.

Mega Bank, which stared this service three months ago, had sought NRB approval to charge the service users 5 percent on deposits and 10 percent on withdrawals, according to NRB sources. “We notified Mega that it cannot charge any fees on deposit collection,” said a senior NRB official. “The same will be applicable for all other banks.”

Central bank officials said it was unusual for banks to charge fees on deposits as their earnings come from resources made available by depositors.

In its recent directive, the NRB has also barred banks and financial institutions (BFIs) from charging customers any king of service fees on deposits following complaints from depositors that banks were charging fees in the name of account maintenance. “The same principle applies to deposits collection under branchless banking service,” said the official.

Mega is running a pilot branchless banking service in Chautara, Sindhupalchwok, and plans to expand the service in other areas.

Mega Bank CEO Anil Shah said they would accept the NRB decision, adding they were, however, committed to their expansion plan. “As this service increases inclusion in the financial sector, we hope that the government will help us,” said Shah.

The central bank has allowed Mega and Siddhartha Bank, which had also sought a similar approval from the NRB, to expand the service to 15 places across the country.

With the urban market reaching saturation levels and untapped resources available in rural areas due to increased remittance, banks are seeking to expand their reach into rural areas.

Banking services are more concentrated in urban areas, with banks collecting 95.3 percent of their deposits from cities and towns, and disbursing 97.1 percent of their loans to these places, according a recent NRB report.

With remittance flowing into rural areas on a large scale and branchless banking not requiring setting up of bank branch, more banks are planning to start this service.

Citizens Bank International is one of them. The bank has applied to the central bank to launch the service. “We want to prove that there are abundant resources in villages,” said Citizens CEO Rajan Singh Bhandari.

Bhandari said they too plan to charge a certain fee on the service. The fee would be less that the amount people have to spend to travel to a bank branch, he said.

Everest Bank, the pioneer in branchless banking in Nepal, has been providing the service in 28 places across the country. It charges Rs 100 for the smart card required for carrying out transactions through POT machines, but not on deposits and withdrawals.

“There is no profit in this business, but we started to increase banking habit among rural people,” said Humnath Gurung, deputy general manager of Everest. “Instead, we have been paying a certain charge to software developer and our agents assigned for carrying out deposits and withdrawals through POT machines.”

Source: Kantipur

Central bank gives breathing space to banks, realtors

KATHMANDU, JAN 9, 2012

Central bank has finally relaxed the property base line for housing loan and extended time period for the banks and financial institutions to bring their exposure to the realty sector down by one-and-a-half year.

The property base line for home loan has been raised to Rs 10 million — from Rs 8 million — and banks and financial institutions can now bring down their exposure to real estate loans within 25 per cent of total lending by the end of next fiscal year 2012-13, the central bank said, in a move to provide relief to the ailing real estate sectors and the financial institutions, both. Earlier, the Nepal Rastra Bank’s had fixed the ceiling of personal home loans at Rs 6 million to increase later to Rs 8 million.

“The move will boost the confidence of the sector,” said Nepal Housing and Land Developers’ Association vice president Om Rajbhandari, who is also a coordinator of the Urban Development Committee of Federation of Nepalese Chambers of Commerce and Industry (FNCCI).

Some of the loans under real estate will now shift to home loan relaxing the banks and financial institutions, he said, it will create some space in the real estate loans and increase the lending capacity of the banks and financial institutions. The personal home loans are not calculated as the realty loans.

“Similarly, the pressure of capping down banks and financial institutions exposure to real estate will be eased by extended time period.”

The central bank’s provisions should boost the buyers confidence as these policies will help develop organised urbanisation, he opined.

Due to low confidence of the home buyers, the sector is still reeling under a pressure putting the banks and financial institutions also under stress.

Last week, High Level Financial Sector Coordination Committee has recommended the central bank to relax the provisions to give a breathing space to both the housing and real estate, and banks and financial institutions.

Earlier, the banks and financial institutions were supposed to bring their real estate loan to 25 per cent by the end of current fiscal year. The central bank had capped them to prevent from systemic failure due to over exposure to the single sector.

The government is also planning to purchase house and apartments for residential purpose of civil servants apart from letting the apartments be used by hotels as the accommodations for the tourists.

The government is also letting foreigners buy apartments in a bid to create new market for the housing sector.

Source: THT

Central bank provides zero interest loans

KATHMANDU, DEC 7, 2011

The central bank has decided to extend interest free loans to commercial and development banks to venture into remote areas this year also to increase financial accessibility.

The commercial banks and development banks are entitled to interest free loans up to Rs 5 million to open branches in the 30 designated districts, the central bank said, "If they opt to open branches outside the district headquarters, they are entitled for the loans up to Rs 10 million."

The provision that was introduced last December had been well received by the financial institutions. "About 12 banks and financial institutions obtained interest free loans from central bank to open branches in remote areas," spokesperson for Nepal Rastra Bank (NRB) Bhaskar Mani Gyanwali, said, adding that most of the loans were meant for branches outside district headquarters.

However, this time, NRB has issued circular stating that the facility will not be extended to the branches being opened near the major highways and the areas surrounding municipalities or VDCs and the district headquarters.

In the last fiscal year, the interest free loans worth Rs 115 million have been provided to banks to open branches in designated remote districts.

Along with the interest free loans, NRB has also enforced the earlier decree of allowing banks and financial institutions to open branch in Kathmandu valley only after opening two branches outside the valley. The banks and financial institutions need to mandatorily open one branch in the designated remote districts before opting for branch in the valley. Though the finance companies are not entitled for the interest free loans to open branches, they do not need to manage additional paid up capital to open branch in one of the 30 remote districts or in municipalities or VDCs that have less than two branches of any financial institutions.

According to the existing regulations, the finance companies need addition of Rs 5 million on its paid up capital to open branch outside Kathmandu Valley and to open a branch within the valley they need to add Rs 20 million on the paid up capital.

Despite the growing number of financial institutions, banking access has not drastically improved in the recent years. NRB governor Dr Yubaraj Khatiwada has also admitted that lack of banking accessibility is one of the major challenges for the central bank.

According to NLSS-III, some 39.9 per cent households have access to commercial banks' branch within 30 minutes walk radius at present from fifteen years ago’s 20.7 per cent households.

Refinancing for hydel projects

Nepal Rastra Bank (NRB) is going to provide refinancing facilities for hydropower loans at 6.5 per cent interest. According to the central bank, the banks and financial institutions that will obtain the refinance facility to finance the hydro projects can not charge the projects more than 10 per cent interest. NRB will provide refinance facility up to 80 per cent of project provided it is considered to be good loan or up to 60 per cent of the financial institutions' core capital.

Source: THT