The Central Bank in collaboration with the financial institutions will defer the loan repayment period and waive interest payments for three months. This will ensure the country to battle one of the biggest difficulties concerning loan repayment obligation faced by people and businesses in the country due to the current pandemic.
These monetary measures are aimed at providing short term monetary relief to sectors facing such financial distress in addition to assisting businesses and local production, including RNR activities to continue.
The Finance Minister launched the monetary and fiscal measures in response to COVID-19 today.
As measures, deferment of loan repayment loans will apply to performing as well as non-performing loans. This is an exception for loans to government, loans to financial institutions and Staff Incentive Loans. The waiver of interest payments shall, however, apply to only performing loans as of 29 February 2020. The cost of the interest waiver will be shared equally between the government and the Financial Service Providers. Financial Service Providers will provide additional gestation period of three months for projects under construction.
As for the tourism-related business, the financial institutions will give loans at an interest rate of five per cent per annum. Also, the National CSI Development Bank will provide loans for three months to help the cottage and small industries. This includes giving Microloans up to Nu 500,000 at an interest rate of two per cent per annum to promote RNR/agriculture and rural activities. And working capital loan to CSIs at an interest rate of four per cent per annum.
Meanwhile, the Finance Minister said, deferment of Business Income Tax and Corporation Income Tax for three months is one of the fiscal measures that is being taken.
“We have decided to exempt rent for tour operators who has its office in government buildings. We are also exempting custom tax and sales tax on the import of goods from third countries beyond India. The Finance Ministry with FCB and Agriculture Department has also started stockpiling essential food items with Nu 737 M,” said Namgay Tshering, the Finance Minister.
One of the immediate economic impacts of COVID-19 is the disruption of business operations resulting in loss of income and employment.
Kinley Dem/Samten Dolkar\
