Kathmandu. Bankers are worried that the number of non-performing loans that have been rising in recent years will increase.
The Genji agitation of September 23 and 24 has turned into violence, severely affecting both the private and government sectors. Bankers say that due to this, the loan recovery of the banks has been affected and the non-performing loans have started increasing.
According to the data released by the central bank earlier, the non-performing loan of commercial banks has reached 4.44 percent as of mid-August. Bankers say the effects of the Genji movement are already beginning to show.
Although the central bank has given various facilities to the private sector to reduce the impact of the agitation, it has not given much to the banks. As a result, banks are facing more problems, complained a banker.
Another banker said that the profit has also contracted due to the impact on loan recovery. According to the banker, there is no demand for loans now. As a result, the cost of deposits in the bank has also increased.
The Nepal Rastra Bank (NRB) has reduced the loss of good loans to 1 percent in order to reduce the loan recovery of the banks, which have been affected since last year. However, the profit of the banks has shrunk due to the increase in loan recovery.
Meanwhile, bankers have been complaining that the bank employees have been facing harassment while going for loan recovery, the local level has not provided necessary support and the government has not ensured security to the employees in the banking sector. As a result, they say, there is a problem in recovery.
They say that after the agitation, everything from the government to security seems to be in disarray.
In recent years, the management of non-performing loans of banks and financial institutions has become very challenging. Passive loans are increasing rather than decreasing. This seems to be a challenge for the banks.
