KATHMANDU: Economic Digest, a daily morning email digest, is basically a relatable summation of important business news from Nepal into easy-to-understand summaries.

Central bank encourages banks for big merger

The new monetary policy for the current fiscal year announced by Nepal Rastra Bank (NRB) has encouraged the banks and financial institutions (BFIs) for their merger meant for fiscal stability.

The monetary policy made public by the Governor of the central bank, Maha Prasad Adhikari, stated that the BFIs with cross-holding investment would be encouraged for their merger. The BFIs under the control of the same promoters and business houses or having the same commercial interests would be merged, it is said.

Likewise, the ‘A’ class banks would get special facilities if they agree to start their joint transaction from mid-July of 2021 after their merger.

Similarly, the banks can also coordinate with the concerned institutions for the adjustment of the deposits of the institutional depositors. The process of merger and acquisition would be promoted also to strengthen the base of the capital of micro-finance institutions.

The central bank has announced a special relief package to the coronavirus affected sectors. As announced, the monetary policy has extended the period of loan repayment for the coronavirus-hit areas including tourism, industry, education, health, communications and entertainment sectors.

NRB caps service charge levied by banks

Introducing the new monetary policy for the current financial year, Nepal Rastra Bank (NRB) has turned strict against the banks and financial institutions collecting undue amount in service charge for offering loan approval.

By enforcing various restrictions, the monetary policy made public on Friday has prevented the banks and financial institutions from charging the customers high in the name of service charge.

The new monetary policy provisions that no commercial banks can take more than 0.75% as service charge while working for loan approval. Similarly, the development banks can take the service charge up to 1% whereas the micro-financing institutions can take up to 1.5% as the service charge for loan approval of the customers.

Before this, there was no uniformity in the service charge the banks and financial institutions collected from the customers. The commercial banks have been taking 1.5% as service charge till date.

No charge to be levied on ATM withdrawal from other banks

No additional charge will be levied on inter-banking ATM transactions.

Unveiling the monetary policy for the fiscal year, Nepal Rastra Bank Governor Maha Prasad Adhikari said the provision will be implemented until the coronavirus crisis is over.

Earlier, the country’s banks had decided to levy additional charges on inter-banking transactions including withdrawal from ATMs, online banking and uses of credit cards after the lockdown was relaxed.

(Compiled and prepared by Swastik Aryal and Nitish Lal Shrestha)

Nepal Economic Digest is a daily morning email digest, basically relatable summations of the most important business news, happenings from Nepal into easy-to-understand summaries.