NRB publishes mid-term review of Monetary Policy 75/76; what were the major takeaways?

Nepal Rastra Bank (NRB) has published the mid-term review of the monetary policy. The main takeaway points form the review, that may affect the BFI’s were as follows:

• Interest on call deposit account provided by commercial banks to be capped at 10%. This might impact many commerical banks which has more call deposit in their total deposits composition.
• Foreign Exchange facility amount to be capped at USD 1,500 per individual against their passport.
• The amount of re-financing loan is increased from Rs 35 arba be Rs 50 arba. The interest rate for this purpose should be charged maximum of 8%. The refinancing rate was slashed by 1%.
• The amount for CSR (Corporate Social Responsibility) to be invested in the growth of the financial literacy in each province.
• All BFI’s will be allowed to raise debt equal to their core capital in foreign currency.
• The premium on loans for productive and priority sector to have a ceiling which will be decided by the NRB.
• The BFI’s will be made to compulsorily issue Debentures.
• Taking necessary actions to stabile the interest on long term project financing.
• The calculation of interest spread should consider as weighted average interest rate of total deposits and total loans.