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Dechen Dolkar 

The opposition party is urging the government to lift the suspension the Bhutan Development Bank has imposed on loans to rural communities.

Following a directive from the Royal Monetary Authority (RMA), BDB, Royal Insurance Corporation of Bhutan Limited, and National Cottage and Small Industry (CSI) Development Bank temporarily suspended disbursing loans due to their high non-performing loans (NPL). NPL are loans with payments that are overdue by 90 days or more.

These financial institutions (FIs) suspended the sanction of new loans from May 13 this year. The RMA also asked the FIs to come up with remedial measures to resolve NPL.



According to the opposition party, suspending loans seriously affected rural communities and small businesses across the country.

“If no immediate action is taken to lift the moratorium, this would lead to deterioration of life and livelihoods of people in rural Bhutan,” the opposition party stated in press response. As BDBL caters primarily to the credit needs of our rural people, its impact cannot be overemphasized.”

The party stated that recognising the implications of the moratorium, especially for farmers and rural enterprises, the Opposition Party placed the issue for debate during a Question Hour in the National Assembly’s last Parliamentary Session.

In response, the government reported to the House that the suspension was temporary and access to loans would be resumed in two to three months.





The Opposition Party reaffirmed that the lack of financial access to rural folks has affected rural enterprises and their livelihood.

“If the moratorium continues, we foresee farming and small-time rural enterprises collapsing which will result in other grave associated problems – such as giving up agriculture and agri-business and increasing poverty, among others,” the party said

The need to immediately lift the moratorium, incidentally, was one of the many critical issues raised by people at public meetings with the Opposition Leader during his recent tour of eastern and southern dzongkhags.

“We urge the government to lift the moratorium immediately,” the opposition party said.

Gangtey gup, Kinley Gyeltshen said that it has been more than six months without access to loans from BDB and it has affected the livelihood of the people.



He said that people in his gewog grow potatoes for commercial use and people availed seasonal loans with a maximum of Nu 100,000 from the bank to buy seeds.

The gup also said that people also avail loans for buying power tillers, constructing houses, and electric-fencing.

An official from BDB said that as per the requirement of the RMA, the NPL threshold should be 7.5 percent by end of 2022. However, as of September 30, the NPL threshold was at 9.2 percent.

The BDB official said that they have submitted remedial measures to reduce NPL to the central bank.

For 2023, the NPL threshold should be maintained at 5 percent and for new loans, the NPL should be at 3 percent.

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