Non-performing loans increase by 22 percent

May 29: The non-performing loans of commercial banks have increased by 22.2 percent in the first nine months of the current fiscal year 2017/18 while the good debt has increased by 15.3 percent in the same period.

Despite suggestions of Nepal Rastra Bank's Governor Dr Chiranjivi Nepal not to disburse loan in risky areas, commercial banks have disbursed a total amount of Rs 33 billion as non-performing loan. This was revealed by the statistics maintained by Nepal Rastra Bank (NRB) as of mid-April this year.

The central bank has defined good debt and loans under meticulous surveillance as ‘active loans’ and termed weak, suspicious and bad debt as ‘non-performing loans’.

According to the loan categorisation of NRB, the loans which have not been repaid for more than six months are called weak loans. Loans amounting to Rs 10 billion was disbursed by commercial banks of Nepal as of mid-April, 2018.