He further said the guidelines were amended to provide additional time for borrowers to repay their working capital loans and to resolve the problems encountered during its implementation.
As per the amendment, businesses that have borrowed working capital loans more than the limit can repay in five installments by mid-July, 2025. Similarly, such loans issued prior to November 16, 2022, can be repaid semi-annually. This has reduced the obligation of the businessman to return the amount taken in excess of the limit immediately. The central bank has said that businessmen who've borrowed in excess of the limit can reschedule and restructure by repaying from mid-July 2023 to mid-July 2025. The central bank has barred BFIs from imposing pre-payment charges or any other fees to borrowers who want to repay the loan before the end of July 2025. Earlier, the NRB had said the working capital loans guidelines would be applicable for loans above Rs 5 million. Now, the central bank has stated that the guidelines will be applicable to working capital loans above Rs 10 million. Similarly, permanent working capital loans could be issued for a 3-10 years period which was earlier for up to five years only. Likewise, the central bank has also reduced the requirement of five years financial statement to get the working capital loans to three years. The amendment by the central bank has given some respite to the business community members who had hit the streets against the implementation of the guidelines. The central bank also softened its stance following the formation of the Pushpa Kamal Dahal-led government and Bishnu Poudel taking charge as the finance minister. Finance minister Poudel, who has promised the private sector leaders to resolve the problems faced by the business community, also pressured NRB Governor Adhikari to find a 'middle ground' on resolving the working capital loans issue. Earlier this week, Adhikari held a series of meetings with private sector leaders and bankers to reach an understanding on rescheduling the implementation of working capital loans guidelines. On Wednesday, Finance Minister Poudel and Governor Adhikari briefed Prime Minister Pushpa Kamal Dahal about the 'middle ground' on the working capital loans. After the meeting with Prime Minister Dahal, the central bank announced the amendment. The central bank enforced the guidelines on October 18 arguing that it seeks to stop the misutilization of money loaned to business firms. The private sector has been demanding suspension of the implementation of the guidelines arguing that the arrangements have adversely affected their businesses. They had termed the guidelines on working capital loans as the 'major obstacle to the business and private sector growth'. The new arrangement
- Industrialists/businesspersons who have borrowed working capital loans more than the limit can repay in five installments by mid-July, 2025.
- Such loans issued prior to November 16, 2022, can be repaid semi-annually.
- Such loans in excess of the limit can be rescheduled and restructured by repaying from mid-July 2023 to mid-July 2025.
- If a borrower wants to repay the loan before the end of July 2025, BFIs cannot impose a prepayment charge or any other fees.
- The guidelines will be applicable to working capital loans above Rs 10 million.
- The central bank has said that permanent working capital loans could be provided for a 3-10 years period. Earlier, the NRB had a provision of providing such loans for up to five years only.
- The central bank has also reduced the requirement of five years of financial statements to get the working capital loans to three years.
