Kathmandu, May 26, 2025 – Nepal Rastra Bank (NRB) has unveiled significant measures in its third quarterly review of the monetary policy for the current fiscal year 2081/82. Aimed at stabilizing the financial system and enhancing investment opportunities, the review introduces new provisions for banks and financial institutions while maintaining key policy rates.
In a major move, the central bank has mandated that banks and financial institutions maintain a daily minimum cash reserve of 90% of the mandatory cash reserve ratio. This step is expected to strengthen liquidity management across the financial sector.
"The policy direction has been cautiously balanced based on the internal economic and financial outlook," stated the NRB. The central bank retained the policy rate at 5%, the deposit collection rate at 3%, and the bank rate at 6.5%, providing stability to interest rate corridors.
Risk Weight on Share-Collateralized Loans Reduced
To encourage lending and investment, NRB has reduced the risk weight for share-collateralized loans from 125% to 100%. This measure is expected to provide relief to borrowers and stimulate investment in the stock market.
Focus on Legal Reforms
The review also highlighted upcoming legal reforms aimed at improving the investment climate. Notable among them is the introduction of the "Foreign Investment and Foreign Debt Management Regulations, 2078," which consolidates amendments to the Foreign Exchange Regulation Act, 2019, and the Foreign Investment and Technology Transfer Act, 2075.
Additionally, NRB announced the formulation and issuance of procedures to certify dishonored checks, aligning with amendments to the Banking Offenses and Punishment Act, 2064.
Implications for Nepal's Financial System
These measures reflect NRB’s commitment to bolstering economic stability and fostering a favorable investment environment in Nepal. By addressing liquidity management, easing risk weights on loans, and introducing regulatory reforms, the central bank aims to strike a balance between economic growth and financial discipline.
Ecosphere News will continue to monitor and report on the impacts of these measures on Nepal’s financial system and broader economy.
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