Nepal Rastra Bank Reduces Risk Weight for Loans Under 30 Million Rupees

Kathmandu. The Nepal Rastra Bank has issued a directive to reduce the risk weight for loans under 30 million rupees. The central bank issued a unified directive to banks and financial institutions mandating this reduction. 

Previously, the risk weight for these loans was 100 percent. 

However, such loans must be for the agricultural, information technology, or manufacturing sectors to qualify for the concession. The central bank stated that this facility will only be available for loans that are insured or have sufficient collateral. 

The government had included the reduction of risk weight for small and medium-sized loans in its 100-point agenda for governance reform. 

According to Nepal Rastra Bank spokesperson Guru Prasad Poudel, this provision was implemented to execute that agenda and to further the SME loan expansion programs previously introduced by the central bank.