Nepal banks allowed to borrow from foreign banks

For the first time, Nepal's central bank has allowed other commercial bank in the country to borrow money from foreign banks and financial institutions to finance sectors such as agriculture and infrastructure projects.

Nepal Rastra Bank's (NRB) board of directors yesterday held a meeting and made a decision to this effect, according to sources at the central bank.

This is for the first time that Nepal's banks are allowed to borrow money from foreign banks. The decision comes in the wake of liquidity crunches facing Nepalese banks.

According to the new regulation, Nepal's commercial banks could borrow loans up to 25 per cent of their core capital.

"The banks can borrow loans for the period from one year to five years to finance productive sector such as agriculture, hydropower, tourism, and infrastructure projects," a senior bank official told PTI.