Nepal Rastra Bank (NRB), through its Bank and Financial Institution Regulation Department, introduced revised operational guidelines for hire purchase financing companies on Wednesday, replacing earlier provisions with stricter regulatory measures. The new policy requires licenses to be renewed every 10 fiscal years with a fee of Rs 200,000. Companies must include the term “Hire Purchase” in their official names, while promoters will face suitability assessments and chief executive officers must meet prescribed educational qualifications. The framework also replaces fixed spread limits with a cost-of-fund-based interest rate mechanism. Service charges are capped at 1 percent and penalty interest at 2 percent. In addition, companies must allocate at least 20 percent of annual net profits to reserve funds until reserves reach twice the paid-up capital, and they are expressly barred from collecting public deposits.
