Nepal Rastra Bank has relaxed its stance on personal loans, third party
collateral and the ban on keeping money by one financial institution in
another financial institution for earning interest.
Though NRB had directed financial institutions to bring down personal loans to below Rs 1 crore and stop keeping money in another bank for earning interest, the central bank, urged on by banks, financial institutions and entrepreneurs, has decided to give them one more year before the directive goes into effect.
The NRB’s directive had worried those who had taken personal loans of over Rs 1 crore with a view to pay back the loan amount in monthly installments. Even entrepreneurs, businessmen and the general public who had taken long term loans through third party collateral found themselves in a fix after banks started piling pressure on them to pay back the loans or include the third party as an owner of the company.
Following the NRB directive, the banks have already stopped issuing loans amount exceeding 1 crore but they have been facing problems in getting back the loans issued earlier and in balance sheet reconciliation.
The banks have also stopped issuing loans based on third party collateral.
NRB reduced the size of personal loans suspecting that the loans are being used for paying installments in real estate and plotting.
A majority of business loans issued by banks and financial institutions have the property of a third party as collateral.
Banks have invested 40 arba77 crore in housing loans till Chaitra. Likewise, they have issued Rs 1 kharba 62 arba in residential, commercial and plotting loans.
src : sharesansar
Though NRB had directed financial institutions to bring down personal loans to below Rs 1 crore and stop keeping money in another bank for earning interest, the central bank, urged on by banks, financial institutions and entrepreneurs, has decided to give them one more year before the directive goes into effect.
The NRB’s directive had worried those who had taken personal loans of over Rs 1 crore with a view to pay back the loan amount in monthly installments. Even entrepreneurs, businessmen and the general public who had taken long term loans through third party collateral found themselves in a fix after banks started piling pressure on them to pay back the loans or include the third party as an owner of the company.
Following the NRB directive, the banks have already stopped issuing loans amount exceeding 1 crore but they have been facing problems in getting back the loans issued earlier and in balance sheet reconciliation.
The banks have also stopped issuing loans based on third party collateral.
NRB reduced the size of personal loans suspecting that the loans are being used for paying installments in real estate and plotting.
A majority of business loans issued by banks and financial institutions have the property of a third party as collateral.
Banks have invested 40 arba77 crore in housing loans till Chaitra. Likewise, they have issued Rs 1 kharba 62 arba in residential, commercial and plotting loans.
src : sharesansar
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