New provision allows commercial banks to take loan from Indian banks

Kathmandu, December 26: Commercial banks of Nepal are now allowed to take loan from Indian banks and financial institutions.
Nepal Rastra Bank devised the provision that Nepal’s commercial banks could take the loan from India’s banks and financial institutions, so that they could float the loan here in tourism, agriculture and micro finances.
The foreign exchange department of the central bank issued a notice on Tuesday, informing that Nepali commercial banks could bring loan from Indian banks in order to float in the country.
If the loan is received in convertible foreign currency while taking loan on Indian currency, it must be limited within 50 percent of the primary capital.
However, the commercial banks are not permitted to take loan for investment in hydropower, solar energy, wind energy, transmission line, tunnel way, airport, cable car, bridges and other physical infrastructures.
The banks having capital fixed by the Nepal Rastra Bank can be allowed by a decision of their board of directors. Such banks should be clean- no blacklisted for any international transactions. Similarly, the foreign loan needs to be paid within one to five years.
However, the renewal of the loan payment is made with NRB permission. RSS