Nepal Rastra Bank has
allowed banks and financial institutions to categorize share investments made
in various microfinance institutions (MFIs) as loans issued to the deprived
sector.
Currently, only institutional share investments made by commercial banks and financial institutions in category ´D´ financial institutions can be labeled as deprived sector loans.
The latest amendment, made through a directive issued on Sunday, has provided one more avenue for banks and financial institutions to flow their credit.
As per the Nepal Rastra Bank´s provision, commercial banks have to channel at least three percent of total loans to the deprived sector. The proportion stands at 2.5 percent and 2 percent for development banks and finance companies, respectively.
The central bank has categorized credit of up to Rs 60,000 extended to low-income groups to set up micro enterprise as deprived sector loans. Loans of up to Rs 60,000 issued to install up to 50 MW of micro hydropower project, solar home system, cooker, dryer and pump, biogas plant, improved water mill or cooking stoves, and wind energy plans are also considered as credit to the deprived sector.
Similarly, loans of up to Rs 150,000 extended to foreign job aspirants and farmers and credit of up to Rs 250,000 issued to each family to conduct businesses such as animal husbandry, fish farming and bee keeping also fall under the category of deprived sector loans.
The central bank has made it mandatory for all the banks and financial institutions to report on credit amount extended to the deprived sector within 15 days of conclusion of every quarter of the financial year. Banks and financial institutions also have to report on utilization of such credit amount every six months if such loans are issued through other institutions.
Currently, only institutional share investments made by commercial banks and financial institutions in category ´D´ financial institutions can be labeled as deprived sector loans.
The latest amendment, made through a directive issued on Sunday, has provided one more avenue for banks and financial institutions to flow their credit.
As per the Nepal Rastra Bank´s provision, commercial banks have to channel at least three percent of total loans to the deprived sector. The proportion stands at 2.5 percent and 2 percent for development banks and finance companies, respectively.
The central bank has categorized credit of up to Rs 60,000 extended to low-income groups to set up micro enterprise as deprived sector loans. Loans of up to Rs 60,000 issued to install up to 50 MW of micro hydropower project, solar home system, cooker, dryer and pump, biogas plant, improved water mill or cooking stoves, and wind energy plans are also considered as credit to the deprived sector.
Similarly, loans of up to Rs 150,000 extended to foreign job aspirants and farmers and credit of up to Rs 250,000 issued to each family to conduct businesses such as animal husbandry, fish farming and bee keeping also fall under the category of deprived sector loans.
The central bank has made it mandatory for all the banks and financial institutions to report on credit amount extended to the deprived sector within 15 days of conclusion of every quarter of the financial year. Banks and financial institutions also have to report on utilization of such credit amount every six months if such loans are issued through other institutions.
Source:Republica;Nepal Rastra Bank
No comments:
Post a Comment