Kathmandu: Nepal Rastra Bank (NRB) has introduced five major policy changes affecting banks, financial institutions, businesses and borrowers at the start of the fiscal year 2083/84.

Through a unified circular issued on Ashar 16, the central bank has revised regulations relating to share-backed loans, electric public transport financing, construction sector loans, the National Identity Card requirement and the calculation of interest income.

Borrowers Get 15 More Days to Pay Interest
One of the most significant changes gives borrowers an additional 15 days to settle interest payments at the end of the fiscal year.

Under the new provision, banks can now recognize interest received up to 15 Shrawan as income for the previous fiscal year. Previously, only interest collected by mid-Ashar could be counted.

The measure is expected to ease pressure on borrowers while allowing banks to report higher distributable profits.

Banks Can Lend Up to 80% Against Shares of Strong Companies
NRB has also relaxed rules on share-backed lending.

Banks will now be permitted to provide loans of up to 80 percent of the value of shares issued by financially strong companies. Eligibility will be determined based on factors such as the company's financial health, paid-up capital, profitability, dividend history, credit rating, regulatory compliance and regular annual general meetings.

Earlier, banks could lend only 70 percent against shares regardless of the company's performance.

Higher Financing for Electric Public Transport
To encourage the expansion of electric public transportation, banks may now finance up to 80 percent of the purchase price of large electric passenger buses.

Previously, the financing limit was capped at 60 percent. The revised policy means entrepreneurs will only need to invest 20 percent of the vehicle's cost from their own resources.

Working Capital Loan Rules Deferred by One Year
Responding to requests from the business community, the central bank has postponed the implementation of stricter working capital loan variance provisions for another year.

The rules will now come into force from 1 Shrawan 2084, providing businesses with additional time to recover from the current economic slowdown.

Loan Restructuring Relief for Construction Companies
Construction contractors facing delayed government payments have been granted access to loan restructuring and rescheduling facilities.

To qualify, borrowers must:
-Submit proof of outstanding payments due from a government agency.
-Pay at least 10 percent of the outstanding interest.
-Apply to their respective bank by mid-Asoj 2083.
-Banks will be required to maintain only a 5 percent loan-loss provision for such restructured loans.

National Identity Card No Longer Required to Keep Accounts Active
NRB has also relaxed the requirement for a National Identity Card in banking services.

Customers will only need to declare through a mobile application or other approved channels whether they possess a National Identity Card by mid-Asoj 2083.

The central bank clarified that bank accounts will not be frozen or blocked simply because a customer has not yet obtained the card.

For Nepalis living abroad, opening an online bank account will no longer require a National Identity Card. Instead, they must update their details within 35 days of returning to Nepal.

In addition, persons with disabilities, vulnerable individuals, those unable to care for themselves, and children under 16 years of age will be allowed to open and operate bank accounts using other valid government-issued identity documents.