Dorji Choden 

The seven banks have approved Nu 236.03 million to 77 applicants under the Economic Stimulus Programme’s Reinvigoration Fund.

In May last year, the government launched the Window-II Reinvigoration Fund to revive businesses and support economic recovery from Covid-19 pandemic.

Under the modality-I subsidy of the scheme, the banks approved Nu 211.12 million to 65 applicants while Nu 24.91 million was approved to 12 applicants under modality-II subsidy.

Modality-I provides interest subsidy, where eligible borrowers can receive a four percent annual interest subsidy on their existing loans for up to three years.

Modality-II provides additional loans and offers a four percent interest subsidy on any new loans taken by borrowers.

Borrowers are responsible for paying the difference between the subsidised rate and the original rate.

Borrowers can choose only one of the two options. The Royal Monetary Authority will allocate the reinvigoration funds to financial institutions based on factors like credit demand and expected impact.

Banks will review borrowers annually to assess their progress and decide whether to continue the subsidy.

In total, banks received 225 applications, amounting to Nu 635.5 million, of which, Nu 463.8 million for modality-I and Nu 171.70 million for modality-II.

Finance Minister Lekey Dorji said that the government’s priority was to revive the businesses affected by the pandemic.  “The government has numerous options for utilising Nu 2 billion, but our priority is to assist businesses severely impacted by Covid-19 that demonstrate a genuine desire to recover,” he added.

The minister said that the banks have a better understanding of their customers and trust them to effectively identify those businesses under non-performing loans (NPLs) that can be supported.

“This assistance can be extended for three years, and if businesses remain under NPLs then the banks will be required to return the support given to the businesses to the government.

Among the participating financial institutions, the Bhutan National Bank Limited approved the highest number of applications, with 44 out of 62 received, amounting to Nu 74.33 million. This included Nu 62.09 million under modality-I and Nu 12.24 million under modality-II.

At the same time, the Bank of Bhutan Limited (BoBL) approved Nu 27.58 million to nine applicants, with Nu 26.64 million under modality-I and Nu 0.94 million under modality-II. BoBL received 55 applications, totaling Nu 259.39 million.

Druk PNB Bank approved all the 17 applications received, amounting to Nu 120.67 million.

The Bhutan Development Bank Limited (BDBL) approved Nu 7.36 million to 9 applicants, out of 47 applications received, amounting to Nu 36.09 million.

Royal Insurance Corporation of Bhutan Limited (RICBL) approved Nu 6.09 million to three applicants. It received 18 applications valued at Nu 25.57 million.

Meanwhile, T-Bank Limited received nine applications totaling Nu 13.91 million, and Bhutan Insurance Limited (BIL) has received 17 applications worth Nu 17.96 million, but none of the applications are approved.

Currently, 137 applications are under assessment, totaling Nu 296.09 million-Nu 164.19 million under modality-I and Nu 131.90 million under modality-II.

So far, 21 applications were rejected due to eligibility and compliance issues. RICBL rejected 16 applications followed by BoBL with 6 applications and 1 application by BNBL.