In its new monetary policy, the NRB increases the home loan limit to Rs 30 million

In its new monetary policy for the next fiscal year, Nepal Rastra Bank (NRB) increased the home loan limit from Rs 20 million to Rs 30 million.

Announcing the policy on Friday, NRB Governor Dr. Biswo Nath Poudel said the goal is to improve access to housing finance and support overall economic growth.

In addition to the higher loan ceiling, the central bank has also put the loan-to-value (LTV) ratio at 80 per cent, enabling home buyers to take out loans that make up a higher percentage of their property value.

They are trying to, hopefully, spur the real estate and housing markets, which has been paralyzed by challenging lending requirements in the past few years. The NRB wants to facilitate for more economic activities by raising the borrowing ceiling but wants to take care on the issue of financial stability.

The new policy is also in line with the NRB’s broader effort to encourage credit flow, and help the economy recover post the coronavirus pandemic.