Banks and Financial Institutions Allowed to Include Shrawan Interest Income in Last Fiscal Year's Financial Statements

Banks and financial institutions in Nepal will now be able to include the interest income earned in Shrawan of the current fiscal year in their financial statements for the previous fiscal year, 2080/81.

Following the monetary policy guidelines, Nepal Rastra Bank (NRB) issued a directive on Monday permitting banks and financial institutions to account for the interest income accrued by the end of Shrawan 2081 as part of the last fiscal year’s profit. The directive states, "Banks and financial institutions must allocate the remaining interest income, after deducting income tax and employee bonuses from the interest earned by the end of Shrawan 2081, to the regulatory fund from the accumulated profit of the fiscal year 2080/81, in accordance with accounting policies."

Moreover, microfinance institutions that have not yet adopted the Nepal Financial Reporting Standards (NFRS) will also be allowed to include the interest income earned by the end of Shrawan in their profit calculations for the previous fiscal year.

This provision enables financial institutions to accurately represent their financial performance and ensures proper allocation of profits and regulatory compliance.