Kathmandu. Banks and financial institutions have to provide loans at easy interest rates for industrial promotion.

The monetary policy of the current fiscal year released by the central bank today will allow an additional two percent premium to be added to the base rate when an enterprise business loan of Rs. 10 million is disbursed. NRB has stated that such arrangement has been made for industrial promotion and business expansion.

Similarly, a policy has been put forward to encourage those who want to become self-employed by purchasing vehicles. With the aim of creating employment environment in the country, provision has been made to enable the borrowers to be self-employed so that the loan up to Rs. At present, banks are providing such loans at an interest rate of five percent. Similarly, the policy has made provision for a single commercial bank to lend up to Rs. 2 billion. Due to the increase in the capacity of commercial banks, such arrangement has been made for the same commercial bank. Earlier, commercial banks were allowed to disburse more than Rs 1 billion.

There was a provision to go for co-financing with other banks and financial institutions when investing in loans above that limit. There was a provision to invest in partnership if any project demanded a loan of more than Rs one billion.

As the amount of investment to be made in the field of hydropower projects and other physical infrastructure will be higher, a provision of up to Rs. 2 billion has been made for a single bank. As per the policy of the central bank, co-financing system is still in place for loans above Rs. 2 billion.