Revised Monetary Policy
NRB vide its circular no. 01/80-81 dated 12.04.2080 has revised certain provisions of NRB directive for the implementation of monetary policy 80/81.
Some of these provisions will have a direct impact on how you will receive loans from Banks and financial institutions. Some important changes that will have a direct impact on individuals are listed below: –
1. PAN Requirement
You will now require to obtain PAN for a loan amount greater than 25 lakhs including group exposure, earlier this limit was 50 lakhs. The government now intends to bring more people under the jurisdiction of PAN through this provision.
2. Home Loans Limit Increased
NRB has increased the limit of residential home loans from 1.5 crore to 2 crore meaning banks can now provide the home loans up to 2 crore. Home loans bear a low charge on capital and a home loan higher than 2 crore will be classified as a real estate loan which will bear a higher capital charge to the bank. In this way, NRB has motivated the banks to increase the size of their home loan and also increased the customer’s need for higher amounts of home loans due to increasing property prices.
3. Priority to Small Sized Vehicle Loans
NRB has reduced the risk weight of personal hire purchases or auto loans up to 25 lakhs to 100% from the previous limit of 150%. Now small-size vehicle loans up to 25 lakhs will attract lower risk weights to banks and all other personal and hire purchase/auto loans will attract a risk weight of 150% thereby making it unattractive for the bank’s financing perspective. NRB is discouraging the financing of high-end personal vehicles.
4. Priority to Small Size Share Loans
NRB has increased the limit for lower-risk weight share loans. Earlier share loans of up to 25 lakhs were considered under lower risk weight which is now increased up to 50 lakhs. The share market was demanding a lower risk weight for all share loans however NRB has applied a cautious approach to promoting the share market through small-size investors.
5. Real Estate Loans through Registered Companies
NRB has reduced the risk weight for the real estate loans carried out through registered/licensed real estate companies. All other real estate loans will attract higher risk weight and thus the banks will not be interested in lending money to individuals and unregistered real estate companies if you wish to start a real estate business you should look to obtain a license.
6. Lending Below Base Rates
NRB has now allowed banks to lend even below the monthly average base rate if it is backed by a subsidy or other grants by government bodies or donor agencies for lending facilities in the directed sector.
