Nepal Rastra Bank has issued a consolidated directive for “Category D” microfinance institutions, setting minimum requirements of 4 percent core capital and 8 percent total capital based on risk-weighted assets. The directive clarifies eligible capital components, excludes certain reserves, and requires regular internal audit certification. It also imposes strict lending caps, limiting wholesale loans to 25 percent of core capital per client or related group, while setting borrower-level ceilings for retail loans in priority sectors such as low-income households, micro-enterprises, renewable energy, and women. Non-compliance will result in corrective measures, dividend restrictions, and full provisioning for excess loans.
