Nepal, June 25 -- Nepal Rastra Bank (NRB) has tightened provisions governing the capitalization of interest on loans extended to long-term projects during their moratorium period.

Through an amendment to the Unified Directives issued on Wednesday, the central bank has allowed Banks and Financial Institutions (BFIs) to capitalize interest accrued on project loans during the moratorium period until the commencement of commercial production and the generation of cash flows.

However, the revised provision applies only to long-term projects that have not undergone restructuring or rescheduling of their credit facilities. If the moratorium period is extended beyond the originally approved terms, the loan will be classified as restructured, r...