Banks and Financial Institutions (BFIs) will now be required to maintain a minimum of 90 percent of their mandatory cash reserves with the Nepal Rastra Bank (NRB) on a daily basis, starting June 1.
According to a circular issued by the central bank on Wednesday, BFIs must keep 90 percent of the required 4 percent of their total deposit liabilities as mandatory reserves with the NRB each day. This marks an increase from the earlier provision, which required only 70 percent to be maintained daily.
In another move, the NRB has reduced the risk weight on share-collateralized loans. The new risk weight has been set at 100 percent for all such loans, replacing the previous provision which placed a 125 percent risk weight on loans exceeding Rs 5 million.
The adjustment follows demands from investors and market participants, who had urged the central bank to reduce the risk weight to ease investment in the capital market. The change was introduced in the third quarter review of the monetary policy.
