Kathmandu. Now, banks will have to manage the risk of electronic credit flow on their own.
Nepal Rastra Bank (NRB) has amended its guidelines on lending through electronic means. According to the amended provision, banks and financial institutions can engage other payment service providers as agents to facilitate in the loan application to loan recovery from potential borrowers.
The amended memorandum also allows banks and financial institutions to collaborate with technology providers (TSPs) to analyze loans from the details of customers’ transactions made through electronic means, payment details and other business-related details in the course of issuing electronic loans. Banks and financial institutions should manage the risks in this regard.
Banks and financial institutions may collaborate with other technology providers (TSPs) to aid credit analysis.
(a) The banks and financial institutions may, with the consent of the customer, obtain the necessary details related to the business and transactions of the customers through the institution providing the system and technology to the customers who wish to use the credit for the purpose of analyzing the electronic credit.
(b) The risk inherent in the credit provided pursuant to point No. (a) shall remain with the concerned bank or financial institution.
c. In the matter of obtaining the details pursuant to point No. (a), the bank or financial institution shall enter into an agreement with the institution providing such details incorporating the provisions including the process of obtaining the details, confidentiality and authoritativeness of the details, consent of the customers, etc. The information of such agreement will have to be given to the Payment Systems Department of the Rastra Bank.
Similarly, if a bank or financial institution provides loan to a merchant associated with a payment service provider subject to the credit limit set forth in this guideline, the payment service provider may, with the consent of the merchant, provide the necessary details related to his/her business and transaction to the bank or financial institution for the purpose of credit analysis.
