Commercial Banks waiting for NRB Report on COVID-19 Impact

NBA Decides not to Implement CBFIN’s Decision

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Commercial Banks waiting for NRB Report on  COVID-19 Impact

April 24: Nepal Bankers’ Association (NBA) has decided to wait for the report of Nepal Rastra Bank (NRB) to study the impact of coronavirus on the economy before announcing any relief package.

A video conference meeting of NBA, an umbrella body of commercial banks, on Thursday decided not to agree with the announcement of the Confederation of Banks and Financial Institutions Nepal (CBFIN) to lower the interest rate.

The meeting agreed to wait for the report prepared by a committee formed by the central bank to study the impact of COVID-19 before announcing any relief package, informed NBA President Bhuvan Dahal.

“CBFIN should have given suggestion to the central bank instead of announcing relief package. We have already informed the confederation that we cannot implement its decision,” said Dahal.

CBFIN, an umbrella organisation of commercial banks, development banks and financial institutions of the country, had on April 22 decided to charge one percent less interest on loans up to Rs 10 million from April 13 onward to small and medium-scale enterprises (SMEs).

The confederation said that its members decided to lower the interest rate considering the impact of coronavirus on the economy and the borrowers.

The confederation had also announced 10 percent discount on payment of interest within the month of Baishakh (mid-May). CBFIN said its members will also not slap any fine if the pending loans are cleared within mid-May. However, NBA has decided to wait for the decision of central bank before announcing any relief to their customers.

However, NBA has already lowered the interest on deposit effective from April 13. The commercial banks had said a week ago that they would reduce the interests on loans only from mid-March after calculating the base rate.

 

 

 

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