Banks allowed to provide loans at lower interest rates than base rate

KATHMANDU, July 28: Banks and financial institutions will now be allowed to provide loans at an interest rate lower than their base rate. The Central Bank has made such an arrangement by issuing a circular on Friday.

However, for such loans, the Nepal Government/Provincial Government/Local Government can avail of the facility of a loan at a minimal interest rate only for the program under its jurisdiction or any aid/grant amount received from any donor agency, which has been specified by banks and financial institutions to be operated in a specific sector and category. 

Such an arrangement was not made before. According to the Central Bank, no loan will be disbursed at an interest rate lower than the average base rate of the last three months.