Loan repayment deadline extended for flood-affected entrepreneurs

Kathmandu, Oct. 14: The Nepal Rastra Bank (NRB) has directed the banks and financial institutions (BFIs) to extend the deadline of installment payment for the entrepreneurs affected by the Bhotekoshi and Budhigandaki floods to mid-January 2027. 

Amending its integrated directives, the central bank added a new clause mandating the BFIs to extend the deadline of loan repayment for flood-affected borrowers by three months, from mid-October 2026 to mid-January 2027. 

As per the circulars published on Tuesday, this provision is for enterprises, projects or businesses directly affected by floods in the Bhotekoshi and Budhigandaki river areas, businesses dependent on the import or export of raw materials, semi-finished goods and finished goods through the Rasuwa Customs Point, and borrowers affected in the flood-hit areas. 

"The BFIs may extend the deadline for instalment payments (principal and/or interest) falling due by mid-October 2026 to mid-January 2027, where borrowers face difficulties in making payments," said the NRB. 

However, it mandated the BFIs to mandatorily conduct a realistic assessment of the borrowers’ financial position, including sales and income, cash flow and reserve funds, the impact on imports and exports, and the actual utilisation of loans before granting the extension for the loan repayment. 

The NRB has issued the same directives for the Nepal Infrastructure Development Bank (Nifra) which carries the same conditions for the extension of the deadline for the entrepreneurs.

Likewise, the microfinance institutions are also directed to follow the same guidelines to extend the loan repayment deadline to mid-January next year. It will be the duty of the microfinance companies to assess the financial circumstances of their clients whether they are facing difficulties in loan repayment. 

Meanwhile, the central bank has directed the commercial banks, development banks and financial companies to designate a focal person to provide the details of transactions relating to financial fraud committed through electronic channels during the festival period – Bijaya Dashami, Tihar and Chhath.  

As per the directives issued on Tuesday, the BFIs are also required to identify suspicious accounts and transactions, promptly freeze them, and facilitate the investigation process. 

"Banks and financial institutions are asked to provide the name, designation and mobile number of the designated focal person, along with a duty on-call email address monitored 24/7, to the Nepal Police Headquarters," read the notice published by the NRB.

Earlier, on September 1, the NRB had directed the BFIs to facilitate the customers affected by the floods and lost their cheques, cards, mobile phones or other documents which are required for banking transaction. 

Then, it had asked the BFIs to verify the identity of such customers using their specimen signatures, photographs and other customer records held by the institution, and to provide the necessary assistance and facilitation under these exceptional circumstances to ensure access to financial services.

Earlier, on August 29, the central bank had allowed the BFIs to relocate or merge the branches affected by the disaster with nearby branches to resume banking services at the earliest, without obtaining prior approval from the NRB. They could notify the NRB within seven days of any such relocation or merger. 

How did you feel after reading this news?