Kathmandu. Nepal Rastra Bank (NRB) has abolished the limit of 200 million share securities loans for institutional investors. The National Bank has issued a circular for banks and financial institutions for the implementation of the monetary policy.

The maximum single customer loan limit for margin nature of share mortgage loans from any one or all licensed institutions has been fixed at 150 million rupees. However, such a limit is not applicable only for institutional investors established with the main purpose of investing in the securities market," the circular said.

Even though the industry/project/business established after the loan has been granted is not in operation due to circumstances, the loan amount has been eased in such industry/project/business where the principal interest of the loan is being paid regularly according to the predetermined arrangement.

When banks and financial institutions buy/sell loans in this way, if the buyer institution is unable to collect the loan, in the case where there is a credit repurchase condition, the seller institution should show the contingent liability in the schedule of the possible liability and accounting comments of its financial statement until such loan is repurchased, and such contingent liability For the purpose of calculating the capital fund, only 20 percent risk weight should be provided.

NRB has arranged to use fund-based loans of 500 million rupees or more and non-fund-based loans of 1 billion rupees or more only in case of construction business.

Licensed organizations can operate up to 2 million rupees in food production, animal husbandry, fisheries, supporting industries for agriculture, agricultural tools production, export industries, handicrafts and skill-based businesses, information technology, tourism and other domestic production related enterprises and manufacturing industries based on 100 percent indigenous raw materials (import (except related businesses) has provided that loan interest should be set by adding only up to 2 percent to the base rate while disbursing loans.

Similarly, banks and financial institutions can also accept agricultural land without a motor road as collateral while disbursing the above-mentioned loans of up to 20 lakh rupees. And, each branch must approve this type of loan application within seven working days and if it cannot be approved, it must be given in writing to the concerned customer with a clear reason.

The Nepal Rastra Bank has arranged that in the case of credit force loans created by claiming the guarantee of builders, such borrowers and related parties should be included in the blacklist only if they exceed the payment for one year in the financial year 2081/82.

The Nepal Rastra Bank has also arranged that investments made in energy related bonds including energy bonds issued by public institutions related to the energy sector and public limited companies can be counted within the specified limits to be invested in the energy sector.