The National Bank issued a directive on Friday and made new arrangements.
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Loans in the non-performing category at banks and financial institutions can be upgraded (converted) directly to the good category after three months of paying all outstanding dues (principal and interest).
Earlier, after paying all the arrears including principal and interest, the loan would be converted to the watch list category for 6 months and only then would it be upgraded to the good category. The Rastra Bank has made the new arrangement by issuing a directive on Friday.
‘In the event that all the arrears (principal and interest) of the loans classified in the non-performing category (excluding restructuring and rescheduling) exceeding the limit are paid and the loan is regularized for 3 months, the loan loss provision will have to be maintained in the same category (poor, doubtful and bad) in which it has been classified and the upgrade will be made only after that period,’ the circular said.
