- Performing Loans:
- Pass Loan: 1% provision. {no due, due to 1 month, loan against fd,nrb debenture. gold/silver loan up to 10 lac taking sufficient collateral}
- Watchlist: 5% prov. {due from 1-3 mnth. Due for renewal more than 1 mnth or extended for max 90 days od. Loan given to non performing client in other bfi. Regular loan with negative networth and loss for last 3 years. For under construction project, after completion of project and commencement of full operated business. Not maintained dsgi ratio. DE ratio 80:20 to greater. Loan provided to any entity which is not operated due to unforeseen reason but regular in payment. Loan above 2 arab which is not under consortium.}
- Non Performing Loan:
- Sub-standard: 25% Prov. {due for 3-6 mnths}
- Doubtful: 50% Prov. {due for 6-12 mnths}
- Loss: 100% Prov. {due for more than 12 mnths. Bakrupt of borrower, misutilization of fund, no contact for 90 days. Force loan nt recovered within 90 days. Proceeded in legal/auction action. Collateral fmv not sufficient. payment for purchased or discounted bills is not collected within 90 days from the due date. Credit card for due more than 90 days. Multiple financial reports. any installment of hydro, cable car, transmission line & renewable energy exceeds 90 days overdue, it must be classified as bad debt, with 100% prov.
loan backed by a construction entrepreneur's guarantee, which hasn't been classified as a bad loan despite not being recovered within 90 days for the fiscal year 2080/81. For the fiscal year 2081/82, the loan will be classified based on the overdue period, and provisions for loan loss will be made accordingly –only for 2081/82)
- A single customer loan limit of NPR 5 million has been set for gold and silver collateral loans. For previously disbursed loans, the limit must be established by the end of Ashar 2083
- Maximum grace (moratorium) period available is 1 year. But can extend seeing the project condition.
- Infrastructure projects like energy with a grace period of more than one year, a proportional loan loss provision must be made each year until the final year, where a 1% general loan loss provision is maintained. For example, if the grace period is 4 years, the loan loss provision will be 0.25% in the first year, 0.50% in the second year, 0.75% in the third year, and 1.00% from the fourth year onward
- Resham, jut, kapas and other professional fruits business: loan loss provision can be set as: 0.33% in the first year, 0.66% in the second year, and 1.00% starting from the third year
- No reschedule for share loan.
- 75% discount in prov. If loan insurance done or backed up by DCGF.
- Margin lending:
- Share price calc is Avg of 180 day or current day price which is lower. Loan upto 70%. Once loan provided no additional loan to be provided on same share. Loan tenure 1 year.
- Bfi to lend margin lending upto 40% of core capital.
- Guarantee claim must pay to beneficiary within 7 days or nrb will pay by deducting bank fund at nrb.
- Interbank Transactions/Borrowings for maximum 7 days.
- Trust receipt loans, bill discounting, or similar import loans can be provided for a maximum period of 90 days.
- Banks and financial institutions can issue personal-purpose loans (including overdraft, mortgage, property, term, and share-backed loans) up to NPR 50 lakh per customer. When providing, increasing, or renewing loans secured by land or property, the loan-to-collateral ratio must not exceed 50%. However, loans backed by fixed deposits, gold, silver, or government/Nepal Rastra Bank bonds, as well as guarantees with a 100% cash margin, are exempt from this rule.
- Pan no compulsory for loan equal or above 25.00 lac
- No bfi can lend other bfi CEO and 2 step down loan except education, hire purchase, vehicle, home loan, house equipment loan, credit card, loan against fd, debenture, gold/sliver. Also to firm having equal or more than 50% share. If availed before should settled within maximum 1 year.
- When providing or renewing loans of up to NPR 50 lakh to firms or companies, banks and financial institutions are not obligated to obtain the latest tax clearance certificate or updated tax filing certificate from the borrower.
- Loans for agriculture, tourism, and small to medium-sized industries/businesses can be granted or renewed based on tax filing documents, for amounts exceeding NPR 50 lakh and up to NPR 2 crore. But above 2cr tax clearance is must.
- Loan details must be filled through id tax payer portal and get submission no.
- External rating must for loan above 50 cr (exempt for loan to microfinance) {For only construction sector, borrowers who utilize fund-based loans of NPR 50 crore or more, or non-fund-based loans of NPR 1 billion or more, are covered under this provision.}
- Collateral must be released within 5 working day after satisfying all liablities of borrower
- The provision related to variance in Clause 7 of the "Guideline on Working Capital Loans, 2079" will be applicable only from 1st Shrawan 2082
- Borrowers who are using multi-bank loans of NPR 2 billion or more must convert their loans into consortium banking. Exempt for loan to micro finance and also to co. providing hire purchase facility when loan secured by fixed assets like vehicles or machinery, can grant loans up to 50% of the asset's purchase price, and if the asset is fully insured, co-financing will not be required consortium
- Collateral without road access can be taken ro loan below or equal to 20 lac for sme, agricultural sector. And loan must be passed within 7 days or to provide reason on rejection.
- loans up to NPR 2 crore for sectors like food production, animal husbandry, fisheries, agriculture-related supporting industries, agricultural tool manufacturing, export industries, handicrafts, skill-based businesses, IT, tourism, and domestic raw material-based production industries (excluding import-related businesses) interest rate br+2 only.
- projects that have begun exporting electricity, interest rate br+1 for fisrt 5 years. reservoir-based hydropower projects, the loan can be provided br+1% only for entire tenure.
- Lon to Liquid oxygen or oxygen plant, vaccine co., biological industry: interest rate br+0
- 2080 earthquake victim br+2 upto 25 lac
- loan given for more than 1 year, for recovery, the loan must have been overdue for at least 6 months. While publishing notice publicly no photo should be attached.
- Recovery in loan -> first satisfy interest than only principal. But in emi loan first due emi should be satisfy first. But if loan has rescheduled or is in loss category satisfy as you wish.
- Interest in moratorium/grace period cannot be capitalized. But can do for agri industry, hydro, medical, local raw materials factory, medical college, vaccine co., tourist star hotel, sugar/milk related entity. Such loan should keep under Interest Capitalized Term Loan (ICTL)
- Penal interest on due principal 2% and should be more than this. Interest on penal interest should not be charged.
- non-commercial
loans based on periodic payments like personal loans, hire-purchase,
the maximum debt repayment-to-income ratio (Debt Service to Gross Income
Ratio- DSGI) is 50%. For loans related to the purchase or construction of real estate, the maximum debt repayment-to-income ratio (DRI)
should be 70%. During full tenure of loan, DSGI, DRI should calculate.
Income should be verified after seeing tax clearance doc on applicable
income. If dsgi, dri is above set limit loan classified as watchlist and
prov 5%
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