NRB Issues New Circular on Collateral Auctions, Provisioning, Loan Adjustments, Blacklisting, and Branch Adjustments
Summary
Nepal Rastra Bank has issued new guidelines allowing more flexibility in loan classification, collateral auctions, provisioning, blacklisting, and branch adjustments for banks and financial institutions.
Key Points
- NRB allows loans regularized after collateral auctions to be reclassified from bad.
- Short-term working capital loans over Rs. 2 Arba under watchlist and not converted to consortium financing excluded from this.
- Banks can revise installment amounts yearly based on income assessment and borrower request.
- Provisioning requirement reduced; banks may take ownership of collateral after three failed auction attempts.
