Year 14 Issue VII Jan-Feb 2020 Volume 34

Re nance Procedure, 2020 Issued

With an aim to ease the
re nancing procedure and
make it more systematic
and effective, Nepal Rastra
Bank (NRB) has issued
'NRB Re nance Procedure,
2020' on January 15, 2020
(2076 Magh 1).
is is the rst such
attempt of NRB’s Bank
and Financial Institutions
Regulation Department
(BFIRD) to systematize the NRB's BFIRD or the Bank's Various policy
re nance procedure. Prior province level offices. arrangements have been
to this, some re nancing e BFIRD will select the made in the procedure
arrangements were applicant and x the time for streamlining the
included in Bank's Uni ed period by prioritizing the re nancing process.
Directive. As per the procedure,
applications received along
As per the procedure, with documents based on re nance facility will be
re nance facility is the following criteria. provided only on good
classi ed into different loan securities. General
types as speci ed by the • National prioritized re nance will not be
Government of Nepal and sector, provided for the overdra,
the NRB. e interest rate • Customer's business / hire purchase and other
to be paid by licensed Banks geographical area of the working capital nature
and Financial Institutions project, loans. However, in the case
(BFIs) in various types of • Prospects of contribution of export re nancing, it
re nance and the interest to the economy and can be provided against the
rate charged by BFIs to employment through collateral for the loan of
their customers will be working capital.
the business/project
xed by NRB. Re nancing Re nance will be
seeking re nance
period will initially be for a provided up to a maximum
facility,
period of one year and can of 25 percent of the
be subsequently renewed • Pro tability and the date primary capital of banks
for an additional year. of establishment, and nancial institutions.
According to the • Concessions deemed as Any client or group will
procedure, the licensed BFIs per debtor's nancial not be eligible to get the
may apply for re nance at position, re nancing facility through
 NRB News

more than one-licensed taxes etc. • Whether it is

BFIs at a time. As per the e procedure also sets appropriate or not to
procedure, the maximum out the need of documents provide concessions
limit of re nance facility and details ful lling the from re nancing
based on the collateral following conditions to interest rate according
of good loan for single get the re nancing facility. to the nancial position
customer, will be up to Rs. Decision are based on: of the customer/
500 million. However, this
• Whether the collateral borrower's business/
limit may not apply in case
offered for re nancing project.
of a consortium loan.
is a good loan or not.
Customers who are • Whether other
• Whether the customer/
getting interest subsidy conditions for licensed
borrower has submitted
through interest subsidy all the nancial details Banks and Financial
procedure for the loan and documents or not. Institutions and
will not be able to apply consumers/borrowers
for re nance facility by • Whether the nancial
statements of the latest have been complied or
using the same collateral.
scal year submitted not.
To provide general
re nance the following by the customer/ If the principal/
aspects are considered borrower for obtaining interest of the re nance
and prioritized; new re nance and the cannot be recovered on
business/entrepreneurs, details submitted to the
the pre-determined date,
concerned tax office
youth, women and Dalit an additional penalty of
are similar or not.
community entrepreneurs, three percent will be levied
small and medium • Whether the debt to
equity ratio is at least to the corresponding bank
enter pr is es/business,
80:20 or not. in addition to the interest
tourism and export
industries, backward and charges. Such BFIs will
• Whether the business/
remote areas/business project contributes to not be allowed to apply for
base, level of pro ts, the economy and is re nance facility for next
contribution to the justi able in general or six months from the date of
economy, employment, not. payment of penalty.

Dr. Bhatta appointed as Spokesperson of NRB

Dr. Gunakar Bhatta, of NRB's different objectives,
Executive Director of NRB's functions and obligations.
Research Department, He started his career in
has been appointed as the NRB in 2000 as an Assistant
Spokesperson of Nepal Rastra Research Officer. Dr. Bhatta's
Bank (NRB) from January 1, contact details are as follows:
2020. As the Spokesperson,
Dr. Bhatta is concurrently Telephone Number:
the Information Officer of Office: 4441045 and 4419805-7
NRB too. He did his PhD in (Ext. 200)
economics from Wayne State Mobile: 9851164200,
University of Michigan USA Res: 4364200
and has in-depth knowledge Email: gunakarb@nrb.org.np
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NRB News

RMAB Governor Mr. Dasho Penjore meets with Governor Dr. Nepal

Mr. Dasho Penjore, technology to enhance cyber NRB's Banks and Financial
Governor of Royal Monetary security in the nancial Institutions Department Mr.
Authority of Bhutan system. Governor Penjore, Dev Kumar Dhakal, Acting
(RMAB) paid a courtesy call briefed the purpose of his Executive Director of the
to Governor Dr. Chiranjibi visit to Nepal and discussed NRB's Foreign Exchange
Nepal on January 7, 2020 at about the payment gateway Management Department
the Office of the Governor. system adopted in Bhutan Mr. Guru Prasad Paudel,
e main purpose of the visit and its implications. Deputy Director of the NRB's
by Governor Penjore, was to Governor Mr. Chintamani Governor's Office Mr.
observe the payment system Siwakoti informed about Govinda Prasad Nagila and
development in Nepal. National Payment Switch, other officials were also
During the meeting, which is in plan to be present during the meeting.
idea and information were implemented by NRB in Similarly, the delegates from
exchanged about the latest near future. RMAB included Executive
practices of the nancial On the occasion, Mr. Director Mr. Julein Gurung,
system adopted by their Bam Bahadur Mishra, Director Mr. Sherab Jamtsho,
respective banks. On this Executive Director of the Chief General Council Mr.
occasion, Governor Dr. Nepal NRB's Payment System Damche Tenzin, Senior ICT
shared an experience on the Department, briefed the Officers Mr. Tashi Yezer and
recent implementation of Bhutanese delegation about Mr. Kinley Yangden.
Real Time Gross Settlement the legal provisions regarding On the same day, the
(RTGS), Electronic Payment the use of Visa/Master Card. RMAB delegation met
System and disaster recovery Executive Director of the with the officials of the
site. He also highlighted the NRB's Governor's Office Dr. NRB's Foreign Exchange
need to increase investment Nephil Matangi Maskay and Management Department,
in information and Executive Director of the Continue on 5 page

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 NRB News

paper.
e representatives
of Banks and Financial
Institutions (BFIs),
international development
partners, payment service
providers, NGOs and
different departments of NRB
had attended the program.
On the occasion, Mr. Saroj
Nepal, National Program
Director of the United
Nations Capital Development
Fund (UNCDF), reviewed
the program and offered
various suggestions. Other
participants of the program
suggested that the local
bodies should also be
included in the campaign.
It was also stated that the
suggestions received in the
program will be addressed
and necessarily incorporated
Nepal Rastra Bank, nancial literacy program in nalization of the FLF.
Office of the Governor has been prepared with the In this program, Mr.
(OFG) organized a objective of implementing Sushil Gyawali, Deputy
discussion program on the it in a systematic manner. Director of NRB's OFG
dra of Financial Literacy He stressed on the need to delivered his vote of thanks
Framework (FLF), which was expand the nancial literacy and stressed the necessity
prepared by OFG. Deputy campaign in a joint effort of of collective efforts from
Governor Mr. Chinta Mani NRB and other institutions the stakeholders' agencies
to conduct nancial literacy
Siwakoti was the chief guest related to the nancial sector.
program more successfully.
of the program. Mr. Suresh Kumar Acting Assistant Director,
On this occasion, Dahal, Deputy Director Ms. Samita Shrestha was the
Executive Director of and Ms. Sudha Bista apa, master of ceremony of the
NRB's OFG Dr. Nephil Assistant Director at NRB's program.
Matangi Maskay, expressed OFG, presented a working e FLF has been
his welcome remarks paper related to FLF. e prepared with the nancial
and informed about the initial phases of FLF, its support of Alliance for
preparation phases of FLF. theoretical and conceptual Financial Inclusion (AFI). A
On the occasion, Deputy aspects, implementation pilot survey was conducted
Governor Mr. Siwakoti framework, expected result, in Achham, Bardiya and
highlighted the importance monitoring and evaluation Gorkha districts whose input
and necessity of nancial mechanism and other issues contributed of development
literacy and informed that the were included in the working of FLF.
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NRB News

'NRB with Students' in Pokhara

the nancial system should
be included in the syllabus
by modifying the existing
syllabus for that.
Mr. Govinda Prasad
Nagila, Director at NRB's
OFG and Dr. Dilli Ram
Pokhrel, Director of NRB's
Pokhara Office discussed
the fundamental contents
of nancial system. e
program was attended by
teachers, officials of school
management committee
and students of class 8-12.
e program was welcomed
by Mr. Nirmal Bahadur
Adhikari, Principal of the
school while Mr. Tej Bahadur
Khand, Deputy Director of
NRB's OFG conducted the
Nepal Rastra Bank, that it is the foundation program.
Office of the Governor (OFG) of nancial access and
organized an interaction inclusion. He also urged the
programme entitled 'NRB students to communicate RMAB Governor Mr. .....
with Students' on January the nancial literacy related Payment Systems
3, 2020 at Janachetan knowledge to their parents. Department and Head of
Secondary School, Nirmal At the program, he stated, Law Division. Similarly,
Pokhari, Pokhara, Kaski. "When every citizen becomes the delegation met with
nancially literate, they will
Governor Dr. Chiranjibi the officials of Himalayan
become aware of nancial
Nepal was the chief guest of services and nancial system. Bank Limited and Smart
the program. e program As a result, the expansion Choice Technology Pvt.
was chaired by Mr. Narayan of nancial access will be Ltd. and discussed about the
Dutta Adhikari, President of oriented towards this target." operation practice of Union
the above-mentioned School Pay International in Nepal,
Governor Dr. Nepal
Management Committee. payment system related
stressed on the need to
On this occasion, impart basic knowledge policies adopted by NRB
Governor Dr. Nepal of nancial system to the and other related issues. e
emphasized on the students starting from the RMAB delegation returned
importance of nancial primary level. According to aer four days visit of
literacy and acknowledged him, the basic curriculum of Nepal.
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 NRB News

IMF mission meets with Governor Dr. Nepal

risks despite the increase in the
credit flow. Governor Dr. Nepal
also informed that the growth
rate of foreign direct investment
has been encouraging along
with the increase in Chinese
investment.
During the meeting,
Mission Chief Ms. Mayor
stressed on the need to make
institutional good governance
including monetary policy
structure, prudent regulation,
strengthening of supervision
system, governance structure
A delegation of the regulation and supervision.
of central bank, strengthening
International Monetary Fund Mission Chief Ms. Mayor of financial federalism,
(IMF) 'Article IV Mission' met expressed concern on the rising public finance management
with Governor Dr. Chiranjibi prices of petroleum products in and effective private sector
Nepal on January 5, 2020. the international market and investment to reduce the risk
The delegation was led by Ms. declining remittance rates, of financial sector.
Laura Isabel Jaramillo Mayor. which could widen balance
Deputy Governor Mr.
The meeting focused on of payments deficit. She also
Chinta Mani Siwakoti,
the agenda of this year's Article expressed her concern with low
Executive Directors Dr. Nephil
IV Mission and the current deposit rates and rising credit
Matangi Maskay, Mr. Dev
state of Nepalese economy. flows, pressure on government
Kumar Dhakal, Mr. Mukunda
During the meeting, Mission spending to increase with
Kumar Chhetri, Dr. Gunakar
Chief Ms. Mayor discussed the implementation of fiscal
Bhatta, Mr. Bam Bahadur
on the Nepalese economy, federalism and risk resulting
Mishra of OFG, BFIRD, BSD,
the risks and challenges of from low private sector
RD and PSD respectively;
economic growth, policy investment.
Acting Executive Director
efforts to mitigate risks, During the meeting, Mr. Guru Prasad Paudel of
capacity building provided by Governor Dr. Nepal stated that NRB's FEMD and other NRB
the IMF and the structure of Nepal's economic growth rate officials had also attended the
financial assistance. Similarly, is in a positive direction and meeting. Similarly, members
she said that IMF has taken informed that investment in of the IMF Article IV mission
positively the efforts of NRB to energy and tourism sector is on Mr. Majid Bazarbash, Mr.
reduce Nepal's current account the rising pattern. He opined Patrick Blagrave, Mr. Kyung-
deficit, reduce poverty, increase that the prudent regulatory Seol Min, Ms. Jiae Yoo and
foreign exchange reserves, system adopted by NRB would Ms. Ranjana Pandit were also
and strengthen financial sector help in reducing the potential present.
Publisher Editor: Editorial Team:
Nepal Rastra Bank Shiva Prasad Ghimire Ganesh Man Maharjan
Office of the Governor Vishnu Datta Pandey
Baluwatar, Kathmandu Lal Kumar Subedi
Ph: No. 4411250 ext: 139/362 www.nrb.org.np Email: samachar@nrb.org.np