Risk Weight Maintained at 60% for Loans Up to NPR 30 Million

Nepal Rastra Bank has maintained the risk weight at 60 percent for loans extended to small and medium-sized enterprises. The government had instructed a reduction in the risk weight for loans up to NPR 30 million. For loans fully secured by the Deposit and Credit Guarantee Fund or by land and buildings, the risk weight will remain at 60 percent. Kathmandu, 22 Chaitra.

Nepal Rastra Bank announced a reduction in risk weight for loans up to NPR 30 million. Following government directives, the central bank has set the risk weight for loans to small and medium enterprises at 60 percent. According to Clause 57 of the Government Directives, the government has arranged to lower the risk weight on loans provided to small and medium enterprises, agricultural sectors, and information technology fields to appropriate levels. The government had given the central bank a 30-day timeframe to implement this.

The central bank states that the risk weight for loans granted to small and medium enterprises, agriculture, IT, and productive industries has been set at 60 percent. Specifically, loans fully secured by the Deposit and Credit Guarantee Fund or by land and buildings have their risk weight reduced to 60 percent. Such loans must be insured by the project, and in cases involving land and buildings, the policy applies only when the difference between market value and loan amount remains at 25 percent. Previously, the risk weight for these loans had been determined based on risk and security assessments.