Kathmandu. Nepal Rastra Bank has adopted more flexibility in the process of blacklisting those who have taken loans and not paid interest. The suffering will be reduced for the companies that have secured loans and have worked in joint ventures.

By issuing new instructions for commercial banks, development banks and finance, the regulatory department of the central bank has instructed to be soft on blacklisting. Henceforth, before including the guarantor in the blacklist, the debtor has to auction the collateral and recover it.

It is mentioned in the instructions that if the recovery from such security is not sufficient and the amount owed by the bank remains, the guarantor should be given 90 days to pay it and the guarantor should be blacklisted only after that notice period.

The Central Bank has also made provision that other companies affiliated to the JV should not be blacklisted because any firm/company involved in the joint venture has been blacklisted. Now, even if one of the companies is blacklisted, the bank/financial institution will not be allowed to freeze the deposit account of another company of the joint venture.

Due to the system of blacklisting investors who own more than 15 percent of shares, the blacklisting of construction companies has been increasing for some time. Also, due to being blacklisted, the social security allowance and pension amount will not be stopped.