The Nepal Rastra Bank (NRB) has announced changes in the risk weightage of auto loans through the third quarter review of the Monetary Policy for 2023/24. 

The central bank has reduced the risk weightage on hire purchase loans provided by banks and financial institutions from 125% to 100%.

Additionally, the NRB has introduced a provision allowing the extension of home loans based on the Debt Service to Gross Income Ratio, increasing the limit from 50 percent to 70 percent, provided appropriate evidence is presented.

In its review of the monetary policy, the central bank has also introduced a provision allowing banks and financial institutions to sell up to 20% of their primary capital in a single fiscal year from investments made in the mid-cap fund.

Furthermore, the loan loss provision requirement for loans classified as 'good loans' has been maintained at 1.20%, slightly reduced from the previous 1.25%.