Kathmandu. An additional financial burden has been put on the state as a large amount of interest subsidy for concessional loans has remained idle in the banks.

According to the report of the Comptroller and Auditor General, the Ministry of Finance had released Rs 5.50 billion to Nepal Rastra Bank in the fiscal year 2081/82 under the Economic Revival, Relief and Concessional Program (Integrated Work Procedure on Interest Subsidy for Concessional Loans, 2075). However, by the end of the year, Rs 2.02 billion was found to be idle as it could not be utilized.

The report of the Comptroller and Auditor General has pointed out that the amount was released again on the basis of the demand of the Rastra Bank without further realistic analysis when even the previous stock of Rs 8.81 billion was not fully utilized.

The government has to bear an additional financial burden of Rs 78.33 million at an average interest rate of 3.87 per cent for not repaying the amount kept in the bank in a passive manner.

Similarly, according to Clause 10 and 13 of the Work Procedure, there is a provision that the interest subsidy can be provided on the loans that have exceeded the deadline, but the lack of updated details from the Rastra Bank has increased the risk of subsidy.

The report points out that there is a lack of a clear mechanism to select grants on the basis of competition and priority despite significant differences in base rates of commercial banks, development banks and finance companies. In addition, the actual utilization of the loan could not be ascertained in the absence of a monitoring report as per the procedure.