Monetary policy aims to ease capital pressure management
Under the new monetary policy, the NRB has reduced the bank rate and the deposit collection rate.
KATHMANDU: The Nepal Rastra Bank (NRB) has introduced several stringent measures under its monetary policy for the fiscal year 2081/82 to manage pressure on the capital and financial resources of banks and financial institutions.
In line with the monetary policy, the central bank has encouraged the use of existing and new instruments to manage pressure on capital reserves.
Furthermore, the policy has reduced the existing 20 percent loan loss provision requirement to 10 percent to support loan recovery mechanisms.
The central bank has also announced a necessary reassessment of risk management related to loan transactions for buying and selling.
Under the monetary policy, the maximum ‘Regulatory Retail Portfolio’ (RRP) limit has been increased from NPR 20 million to NPR 25.5 million.
Banks and financial institutions will calculate ‘Tier-2 Capital’ under the ‘Capital Adequacy Framework-2015’, ensuring that appropriate reserve amounts in ‘Regulatory Reserves’ exceed double the primary reserve.
