Kathmandu. Nepal Rastra Bank has issued regulations regarding last creditor facilities. The National Bank has issued this regulation targeting the inter-banking market, daily liquidity facilities, open market transactions and banks and financial institutions that cannot meet their immediate obligations.

Rastra Bank has set various limits for providing Lender of Last Facility. The National Bank has brought regulations to provide such facilities in cases where savers are unable to pay their deposit obligations, unable to give loans, and when the problem in the institution affects the overall economy.

It is mentioned that the interest rate of the loan provided as the last creditor facility will be provided in such a way that the penal rate will be added by 2 percentage points to the prevailing bank rate. It is said that the licensed institutions using the Lender of Last facility will be regularly monitored in relation to whether or not they are complying with the prescribed conditions.

The facility is available in these 7 cases

- If the licensed institution is unable to manage the required liquidity through interbank market, daily liquidity facility, open market transaction and permanent liquidity facility.

- If the licensed organization is unable to meet its immediate obligations due to lack of marketable assets. If the licensee is unable to meet its immediate obligations when a large amount of deposit is paid or payable.

- If the licensed organization fails to provide the promised loan and it has a negative impact on the economy.

- If there is a situation where a systemic risk is created due to the problem or impact of any one licensed organization causing the collapse of other healthy organizations.

If the public's confidence in the banking system may decrease due to the licensee being unable to meet its financial obligations.

- If the licensed organization is unable to pay its immediate obligations due to natural calamities.

- If the licensed organization is unable to fulfill its immediate obligations due to unfavorable conditions created due to national and international circumstances.

- If the licensed organization is unable to fulfill its obligations and if such organization is taken into liquidation, it may create a challenge in the economy and financial system.