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Loan repayment period for construction entrepreneurs extended to Ashar-Mashant, interest will be reduced by paying only 10 percent

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Kathmandu. The deadline for construction entrepreneurs to repay their overdue loans has been extended to Asar Mashant. The Nepal Rastra Bank issued a circular on Wednesday, extending the deadline for submitting loans.

According to the circular, now construction entrepreneurs can reschedule their loans by paying 10 percent of the total interest amount until Asar Mashant. The circular of the National Bank states, ‘In the case of loans related to construction business that have been disbursed to construction entrepreneurs whose construction work has been completed after ensuring resources from a public body or whose construction work is in progress but whose payments are yet to be received, the licensed institution may reschedule and/or restructure the loan after recovering at least 10 percent of the interest payable based on the need and justification, after analyzing the cash flow at the request of the borrower:

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Such rescheduling and/or restructuring must be completed by mid-Ashar 2082.’

The circular states that the loans rescheduled and/or restructured in this way should be classified at least in the same category in which they were classified in mid-Mansir 2081. In addition, the National Bank has clarified that no penalty interest will be charged for such loans for that period.

A 5 percent loan loss provision will have to be maintained on rescheduled or restructured loans. However, the loan loss provision made earlier will not be able to be written back.

For this provision, commercial banks will have to mandatorily verify the documents pending payment from the relevant public bodies.

This is the first decision taken by Neelam Dhungana after assuming the responsibility of the Acting Governor of the National Bank. Earlier, a monetary policy was introduced that did not allow construction entrepreneurs to be blacklisted until Mangsir-Mashant.

 

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