First Quarterly Review of Monetary Policy: Increase in Overdraft and Microfinance Credit Limits
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Media Baaji
- Mon, 1 December 2025
Kathmandu. Nepal Rastra Bank has increased the limit of overdraft and microfinance loans to increase the flow of credit in the banking system. Releasing the first quarter review of the monetary policy of the current fiscal year 2082 (83), the National Bank has decided to increase the personal overdraft loan limit from 5 million to 1 crore rupees.
Similarly, the maximum limit of mortgage loans from microfinance institutions has also been revised to a large extent. According to Rastra Bank, this limit, which was earlier limited from 7 lakhs, has now been increased to 1.5 lakhs.
Two years ago, while adopting a tight monetary policy, the National Bank reduced the credit limit of overdraft loans and microfinance. The limit was cut because the poor class was in trouble, especially due to the excessive debt burden of microfinance. However, taking into consideration the current situation of excessive liquidity in the banking system and weak credit expansion, the central bank has again increased the limit.
The review also includes a provision to provide relief to borrowers who have trouble paying installments by taking microfinance loans. Now they will be able to modify the loan payment schedule if necessary.
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