Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) has further tightened its regulatory role to discipline the hire purchase companies that provide goods in installments. <\/p>\n
The Nepal Rastra Bank (NRB) has introduced a new and stringent standard to measure the qualifications of the directors of the company acquiring, renewing, managing the risk and running the company through the policy and procedural provision to approve the company issuing hire purchase loans. <\/p>\n
Nepal Rastra Bank (NRB) has taken strict measures to curb the trend of people not working for years with a license. Now, the company will have to start commercial business within 6 months of the approval of the Hire Purchase Loan from the Rastra Bank. If the business is not started within 6 months, the permission will be automatically canceled. <\/p>\n
Now, the hire purchase companies will have to renew the loan by paying a fee of Rs 2 lakh by mid-July after the end of every 10 fiscal years. If the renewal fee is not done within the stipulated time, it can be renewed by paying 10 percent additional fee until mid-August and 20 percent by mid-October. The license of a company that does not renew by mid-October will be canceled forever and such a company will never be approved again. <\/p>\n
The qualifications of directors and chief executives are set to ensure that the leadership of the company does not fall into the hands of irresponsible people. To become the Chief Executive Officer or Managing Director of the company, you should have at least a bachelor’s degree. <\/p>\n
A person with a criminal antecedent, convicted of fraud or corruption, bankruptcy and blacklisted for less than 3 years will not be eligible to become the chief executive officer. Individuals holding more than 25 percent of the shares of the company will have to inform the Rastra Bank within 15 days of the sale or transfer of shares. <\/p>\n
In order to address the risk of loan recovery in time, the rule has been introduced to divide the loan into three categories and make it mandatory to manage the loss. If the installment is delayed by more than six months, then 50 percent of the arrears will have to be provisioned. <\/p>\n
If the installment is delayed by more than a year, 100 percent of the entire arrears should be provisioned. Loans more than 6 months will be considered as non-performing loans and the interest income can be shown only after receiving cash. <\/p>\n
Companies will not be allowed to take loans from banks and financial institutions more than 10 times their net worth. Loans cannot be given to more than 30 percent of the net worth of the same customer or group. <\/p>\n
At least 20 percent of the net profit and 10 percent thereafter should be kept in the reserve fund every year until the paid-up capital doubles. <\/p>\n
Hire purchase companies will not be allowed to collect any kind of savings or deposits from the public. <\/p>\n
These new provisions of the NRB are believed to make the hire purchase sector safe, transparent and financially strong. <\/p>\n
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Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) has further tightened its regulatory role to discipline the hire purchase companies that provide goods in installments. The Nepal Rastra Bank (NRB) has introduced a new and stringent standard to measure the qualifications of the directors of the company acquiring, renewing, managing the risk and running the company through […]<\/p>\n","protected":false},"author":5,"featured_media":229318,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45117,45031,45159],"tags":[],"class_list":["post-310629","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bank-finance-en","category-banner-news-en","category-news-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/310629","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=310629"}],"version-history":[{"count":1,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/310629\/revisions"}],"predecessor-version":[{"id":310630,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/310629\/revisions\/310630"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/229318"}],"wp:attachment":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=310629"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=310629"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=310629"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}