Nepal Rastra Bank First Amendment to the Refinancing Procedure:
Nepal Rastra Bank (NRB) will provide special refinancing to exports, women entrepreneurs, enterprises / businesses run by differently-abled persons, and areas affected by natural calamities. Nepal Rastra Bank has made the first amendment to the refinancing procedure 2077 to provide relief to small entrepreneurs, investors, and hydropower developers.
It is mentioned in the revised working procedure that a special kind of refinancing will be provided to the existing exports, women entrepreneurs, enterprises / businesses run by differently competent people, areas affected by natural calamities, and hydropower projects smaller than 10 MW. The interest rate on refinancing is set at 3 percent.
The new arrangement will help to raise the problem of small hydropower projects of less than 10 MW financially. NRB has also directed the banks and financial institutions to follow the revised procedure.
According to point 5 of the procedure, refinancing is classified into three types. The first category includes micro, home, and small enterprise refinancing, the second special refinancing, and the third general refinancing. The facilities available to the hydropower projects have been placed in the special refinancing i.e. second category.
Provision has been made for NRB to charge one percent interest on a special type of refinancing and the financial institution will be allowed to charge customers and service recipients up to 3 percent. On this basis, the hydropower sector will get this facility for a maximum of one year. Earlier, there was no refinancing facility for hydropower projects.
Even in the half-yearly review of the monetary policy of the current Fiscal Year 2077/78, it is mentioned that refinancing will be provided to hydropower projects smaller than 10 MW. The revised procedure calls for a lump sum remittance from a licensed institution and a maximum limit of 50 million and the lump sum refinance should not exceed 70 percent of the total refinancing amount.
Similarly, the maximum refinancing limit of the refinancing provided by the bank will be Rs. 200 million and the refinancing amount will not be more than 20 percent of the total refinancing amount.
