Central Bank opens door for commercial banks to borrow from foreign lenders

At the time when BFIs are short of investable fund, Central bank has opened the doors to borrow from International lenders. However, the borrowing amount will depend upon the bank's core capital. One can borrow as much as 25% of their core capital. Core Capital is the sum of company's capital and reserve. The loan repayment period can to be between 1-5 years.  

Moreover, the borrowed amount can be invested in the sectors such as hydropower, roads, tunnels, airports, cable cars, and other infrastructures (Except housing, Real estates etc ). The fund should not be used in interbank lending. The amount as stated above can be borrowed after it is approved by the board members of the bank. 

As per the data collected from the 2nd quarter report of the BFIs, the 28 commercial banks can borrow 82 arba in total. This rule from NRB will certainly ease the ongoing credit crunch to some extent.