NRB extends time to confine collateral
Kathmandu, Jan 15 -
Nepal Rastra Bank (NRB) has extended the timeframe for regional or district level financial institutions to confine the collateral they had taken from borrowers until the end of the current fiscal year.
The latest directive of the central bank extended the timeframe from the earlier mid-January deadline.
NRB has barred financial institutions licensed to operate within a certain geographical area from accepting collateral from outside the area while giving loans. Project loans are exempted from this rule. The timeframe was extended for those who had already accepted fixed asset as collateral outside the operation area.
If they fail to adjust the collateral within the set timeframe, they will have to make cent percent provisioning of the credit amount, as per the NRB directive. Regional level financial institutions, however, have criticised the central bank's directive.
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