Kathmandu: The Nepal Rastra Bank (NRB) has published its bi-annual review of the monetary policy for the fiscal year 2081/82, keeping key interest rates unchanged while making adjustments to vehicle loan provisions.

The policy rate remains at 5 percent, while the deposit collection rate stays at 3 percent, and the bank rate at 6.5 percent, according to the central bank. Additionally, banks and financial institutions have received minor relaxations on credit flow provisions, with the loan loss provision for good loans reduced from 1.10 percent to 1 percent.

One of the significant changes in the review is a revision in the loan-to-value ratio for vehicle loans. Previously, individuals could receive up to 80 percent financing for electric vehicles, but this has now been lowered to 60 percent for both personal and all types of electric vehicles.

The NRB maintains that these measures will support economic expansion and help achieve the government’s economic growth targets. However, recent financial indicators suggest that most economic metrics, aside from external indicators, are performing poorly. The average inflation rate for the first six months of the fiscal year stands at 4.97 percent.

NRB Directs Provident and Investment Funds to Strengthen Anti-Money Laundering Measures
In a separate move, NRB has issued a directive to agencies such as the Employees Provident Fund, Citizen Investment Fund, and Social Security Fund to tighten financial controls and prevent money laundering and terrorist financing.

The new guidelines require these institutions to mandate Know Your Customer (KYC) verification based on citizenship or national identity cards, classify and monitor high-ranking individuals, and identify their family members and associates.

Furthermore, institutions must report suspicious transactions in accordance with the procedures issued by the Financial Information Unit under NRB. This step is aimed at enhancing financial transparency and curbing illicit financial activities.