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Banks Unable to Disburse Agricultural Loans as per the Target  set by NRB 

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Banks Unable to Disburse Agricultural Loans as per the Target  set by NRB 
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February 21: Nepal Rastra Bank (NRB) has made it mandatory for commercial banks to invest a certain percentage of their total loan in agriculture in order to increase the investment in the agricultural sector. However, the banks are facing difficulty to meet the target. 

In the monetary policy of the last fiscal year (FY), the NRB had made provision for the commercial banks to disburse 15 percent of their total credit to the agricultural sector. NRB has set a calendar to meet the target. However, banks have not been able to disburse loans as per the target. 

NRB has given the deadline of mid-July 2023 for the banks to increase the loan flow to agricultural sector to 15 percent. NRB has instructed the banks to increase the loan flow to 11 percent by mid-July 2021 and 13 percent by mid-July 2022. As of mid-January 2022, credit flow to agricultural sector of only five banks have exceeded 13 percent of the total loans. 

Even though the banks have to increase the agricultural loan to 11 percent by mid-July 2021, 10 banks have not been able to make the required investment as of mid-January 2022. 

Nepal Rastra Bank has arranged subsidy on interest for agricultural loans to increase investment in the agricultural sector. Under this facility, 51,756 customers have availed loan facilities from banks as of mid-January. They have borrowed Rs 136 billion. 

 

 

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