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Central Bank Relents Its Harsh Rules On Lending
By KTM Metro Reporter
June 29, 2010: ultimately the Central Bank of Nepal called Nepal Rastra Bank (NRB) has relented and allowed the commercial banks and financial institutions to extend the payment schedules of loans provided to the property developers on the condition that borrowers pay 25% principal and all the interests accumulated so far. This provision is valid for one year. The banks and financial institutions need to complete the rescheduling of loans in the current fiscal year.
NRB had restricted commercial banks and financial institutions loans to the property developers to 40% of their total loans at the maximum in December 2009 to stop the heat felt in the property development sector of the economy. Such actions of the NRB have caused the fall of property development by 26 percent in the first 11 months of the current fiscal year in the Kathmandu Valley.
