NRB lays down rules for companies offering hire purchase loans; paid up capital of such companies to be increased to Rs.30 Crore by Ashadh 2078

The Nepal Rashtra Bank (NRB) has issued a circular regarding the paid up capital requirement of companies that offer hire purchase loan. As per the circular, the companies offering hire purchase loans are required to increase their paid up capital to Rs.20 Crore till end of Ashadh, 2077 and to Rs.30 Crore till end of Ashadh, 2078.

Along with the minimum paid up capital requirement, the companies offering hire purchase loan are required to follow other regulation stated by the NRB. Earlier, these companies had to deposit 0.1% of the paid up capital with NRB which has now been increased to 0.2% of the paid up capital.

The NRB will make a detailed analysis about the prospects and the health of the company before giving the approval to companies issuing hire purchase loan. The companies are required to begin their operations within 6 months of getting the approval.

The validity of this approval will be of two financial years after which the companies are required to pay Rs.2 Lakhs as renewal fee. The renewal must be done by end of Shrawan. If it is delayed till end of Bhadra, it will attract 10% extra as penalty while renewal till end of Ashoj will attract 20% penalty. Any further delay will result in revocation of the approval. If the approval has been revoked once, the NRB won’t provide approval to the same company again.

If the company has taken a loan for the purpose of providing hire purchase loan, then the interest on such loan should not be greater than 3%, as per NRB.