20 percent limit on current capital loan up to 10 million

Dec Sun 2021 01:08:31

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20 percent limit on current capital loan up to 10 million

Kathmandu. The Nepal Rastra Bank (NRB) has set a criterion that the total working capital limit should be maintained only up to a maximum of 20 percent of the estimated annual turnover / sale when determining the limit of working capital loan of Rs. 10 million or less. The NRB has set such criteria by issuing guideline on working capital loan, 2078 BS on Sunday.

"Firm / Institution / Company shall be required to maintain a total working capital credit limit of up to a maximum of 20 per cent of the estimated annual turnover / sales when determining the total working capital limit of Rs. 10 million or less flowing from one or more banks and financial institutions." It is mentioned in the directory.

Similarly, NRB has proposed that if the loan is found to be misused during the physical inspection of the goods in stock, the loan should be classified as bad category and 100 percent loan loss provision should be maintained.

Banks and financial institutions will have to keep a self-certified monthly statement of the borrower's customer when disbursing working capital loan of up to Rs. 10 million. In case of working capital loan of up to Rs. 10 million to Rs. In case of working capital loan of more than Rs.

NRB has stipulated that the working capital credit limit should be approved on the basis of detailed analysis of whether the estimated financial statements submitted by the borrower are realistic and close to reality. It has been said that the estimated financial statements should be analyzed on an annual basis.