KATHMANDU, April 10: The Nepal Rastra Bank (NRB) has issued a new circular providing significant relief to construction entrepreneurs. Under this new provision, contractors with outstanding payments from public bodies can now restructure or reschedule their loans by paying only 10 percent of the interest due. This facility is valid until the end of Asar 2082 (mid-July 2025), the NRB stated.
This arrangement is targeted at contractors whose projects have either been completed or are ongoing, but whose payments are still pending from public entities. The circular specifies that financial institutions with licenses can restructure or reschedule loans by collecting a minimum of 10 percent of the due interest based on a cash flow analysis conducted on the borrower's request.
Revised interest rate corridor system introduced
However, there are conditions attached to the restructuring. Loans that are restructured must remain in the same classification as they were at the end of Mangsir 2081 (mid-December 2024), and penalty interest cannot be charged on such loans. Furthermore, a 5 percent loan loss provision must be maintained, though previous arrangements cannot be reversed.
The NRB has also clarified that entrepreneurs seeking this relief must present proof of outstanding payments from the relevant public bodies. Construction businesses have long complained about delays in payments, which have caused difficulties in managing loans. This circular is expected to ease their financial burden and facilitate smoother business operations.
