Kathmandu. Nepal Rastra Bank has urged the general public to thoroughly evaluate their income, financial condition, interest rate and ability to repay loans before taking loans. Issuing a message on financial literacy and customer protection, the Rastra Bank has advised not to take unnecessary loans and to use the loan for productive and income enhancement purposes.
According to the Rastra Bank, before taking a loan, you should evaluate the debt service to income ratio of your income. It has been mentioned that taking a new loan to repay the installment of the loan taken earlier can increase the risk of excessive debt, so the decision should be taken only after understanding the alternative measures.
Similarly, the central bank has suggested to compare the interest rates, service charges, procedures, loan tenure and terms provided by different banks and financial institutions while taking loans. It is also said that the actual annual cost of the loan should be calculated and information should be taken whether the interest rate is fixed or variable. The Rastra Bank has urged to read all the terms carefully before signing the loan agreement and pay the installments on time. One should be aware of the delay in installment payment as there may be late fees and compound interest.
The Rastra Bank has also emphasized that the legal obligations and conditions related to the mortgage or collateral should be clearly understood while keeping the loan or collateral. It has also suggested to use the borrowed amount only according to the specified purpose, to keep in mind the possible risk of loss of income and to understand the provisions related to loan insurance as needed. The Rastra Bank has said that if there is difficulty in repaying the loan, it should contact the concerned financial institution on time and look for options for the solution.
The Rastra Bank has also stated that customers can get information related to financial services, get necessary counseling and complain about service dissatisfaction. It has also urged to take loans only from formal financial institutions and warned that complaints related to loans taken from the informal sector may not be heard. The Rastra Bank has urged the public to understand their rights and responsibilities while carrying out financial transactions and take loans responsibly and maintain financial discipline.
Where to complain?
Complaints related to financial services can be made online through the Nepal Rastra Bank’s Grievance Registration Portal .
