During the last Question and Answer session for first session of the fourth parliament, Boomdeling-Jamkhar Constituency MP Wangdi raised concerns about the rising non-performing loans (NPLs), which have reached Nu.19.349 billion, making it difficult for people to obtain loans.
Lamgong-Wangchang Constituency MP Sonam Tashi also expressed similar concerns on difficulties faced by business owners over loans.
He shared that many have been unable to revive their operations despite loan deferrals and interest waivers, resulting in a significant number of loans becoming non-performing, which disqualifies them from obtaining new loans and bank guarantees necessary for performance security and mobilization advances. The MP inquired whether the government would consider implementing temporary measures to help.
In response to the above two questions, Finance Minister Lekey Dorji said, “The RMA has implemented various monetary measures, including a loan restructuring facility, to help borrowers with impaired repayment capacities and to maintain the capital position and lending capacity of financial institutions. Existing measures include loan restructuring and rescheduling, which offer options like loan splitting, partial repayment, and tenure extension to prevent loans from becoming non-performing. Additionally, financial institutions can still provide loan deferment for up to one year until June 2025 based on their assessment of borrowers.”
The RMA has also relaxed the cooling period required for NPL borrowers, reducing the uniform cooling period of six months to three months or eliminating it entirely based on the borrower’s case.
The RMA has implemented bold and timely monetary measures, including loan repayment deferments, restructuring and rescheduling of loans, and extending the allowable loan term to prevent loans from slipping into non-performing status.
Recognizing the need to continue supporting struggling businesses, the government has allocated Nu.2,000 million from the Economic Stimulus Programme (ESP) to support distressed businesses with revival potential and economic contribution, thereby reducing the NPL.