Kathmandu. Nepal Rastra Bank has relaxed the policy on working capital loans. Addressing the demands of businessmen, the National Bank has amended the Guidelines on Working Capital Loans, 2079 BS. According to the revised guidelines, banks and financial institutions will now be able to determine the repayment period of permanent working capital loans themselves. Earlier, such loans were required to be between 3 and 10 years.

Along with this, banks will now be able to set the minimum and maximum limits for such loans by analyzing the nature of the business, sector and cash flow. The National Bank has also relaxed the arrears limit for cash credit loans. Earlier, there was a provision to maintain arrears less than 10 percent of the loan limit, but now it has been reduced to less than 30 percent of the loan limit.

Previously, a waiver has been given to permanent working capital loans that have been repaid once by mid-Ashar 2083 BS, considering the cash flow and needs of the borrower. The amendment also provides that during such rescheduling, the loan will not have to be downgraded to the bad category or additional loan loss provisions will not have to be made.

Similarly, the NRB has also facilitated the rescheduling of loans of entrepreneurs displaced due to the expansion of the East-West Highway and Mid-Hill Highway, including Hetauda. In the case of such loans, it has been mentioned that if the bank analyzes the cash flow and pays at least 10 percent of the interest due at the request of the borrower, the loan can be rescheduled or restructured. However, this facility must be availed by mid-Ashar 2083. In this way, while restructuring the loans of the displaced people on the highway, banks will not have to downgrade the loan to a lower category and even make additional provisioning.