IN 30 SECONDS
- Banks cannot **increase credit limits** for existing borrowers during the last month of each quarter (Ashoj, Poush, Chaitra, and Ashadh)
- However, existing borrowers **can still renew loans** or draw down money within their already-approved credit limits during those months
- **New borrowers are completely exempt** from this restriction and can get fresh credit limits approved at any time
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WHAT IS THIS ABOUT
Nepal’s financial year is divided into four quarters, and the last month of each quarter — Ashoj (Sept/Oct), Poush (Dec/Jan), Chaitra (Mar/Apr), and Ashadh (Jun/Jul) — are critical reporting periods for banks. Nepal Rastra Bank (NRB), the country’s central bank, has a rule that restricts certain lending activities during these months. This has caused confusion among businesses and borrowers about exactly what they can and cannot do.
The NRB published this clarification to clear up a common misconception: many people believed that getting **any** working capital loan during quarter-end months was completely prohibited. That is not the case, and the central bank wants borrowers and banks alike to understand the precise boundaries of this rule.
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WHAT DOES IT ACTUALLY SAY
- **The restriction applies only to existing borrowers getting a credit limit increase.** If you already have a loan or credit facility with a bank, your bank cannot raise your approved borrowing ceiling during the last month of any quarter.
- **Renewing an existing loan is still allowed.** If your working capital loan is due for renewal in one of these months, the bank can process that renewal — you won’t be left without access to credit just because of the timing.
- **Drawing down money within an already-approved limit is also allowed.** If your bank has already approved a credit limit of, say, Rs. 50 lakh, you can still actually use (draw) that money during a quarter-end month — you just can’t get the Rs. 50 lakh limit bumped up to Rs. 75 lakh.
- **There is a practical workaround for urgent cases.** If a bank genuinely needs to approve a new or increased credit limit during a quarter-end month, it can do so — but the actual release of funds must happen in the following month.
- **New borrowers face no restrictions at all.** If you are approaching a bank for a working capital loan for the first time, the quarter-end timing does not affect you. Your application can be processed and funds released normally.
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WHAT DOES THIS MEAN FOR YOU
**If you’re a business owner with an existing bank loan or credit line:** Don’t panic if your credit limit review falls in Ashoj, Poush, Chaitra, or Ashadh. You can still use money within your existing limit and renew your loan as normal. You just won’t be able to get a higher limit approved and funded in the same month — if you need more credit, the bank can approve it but will release the extra funds from the following month onward. Plan your cash flow accordingly and talk to your relationship manager in advance.
**If you’re a new borrower** looking for a working capital loan for the first time, this rule doesn’t apply to you at all. You can apply and receive funds regardless of which month it is.
**For banks and financial institutions:** This clarification reinforces that the restriction is specifically about limit enhancements for existing clients, not a blanket lending freeze. Compliance officers should ensure branch staff communicate this accurately to customers to avoid unnecessary loan processing delays.
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WHAT HAPPENS NEXT
This is an existing NRB policy, and this post is a **clarification** rather than a new rule — so no new implementation timeline applies. The key dates to watch are the final months of Nepal’s four fiscal quarters: **Ashoj, Poush, Chaitra, and Ashadh**. Businesses that anticipate needing increased credit should proactively approach their banks **before** these months arrive to avoid any delays. Watch for any future NRB circulars that may amend or update this working capital loan framework.
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