Kathmandu. Due to the ineffective recovery of bad loans, the banks in the current financial year 2082. In the two months to August 1983, more than Rs 200 million worth of non-banking assets have been added.
This is according to the data released by Nepal Rastra Bank. The cost of banks is increasing due to the lack of credit expansion, while the non-banking assets are piling up in the banks due to the difficulty in recovering old loans.
The slowdown in the banking sector has not yet improved. The private sector is not increasing the demand for loans, which is creating more pressure in the banking sector.
Deposits in banks are on the rise. Nepal Rastra Bank (NRB) is constantly pulling money from the banking system to manage more liquidity.
As of mid-August of the current fiscal year, the NPAs of the banks and financial institutions stood at 4.62 percent. During the period, the total non-banking assets of banks and financial institutions amounted to Rs 50.75 billion. Previous fiscal year 2081. As of mid-July 2018, there was non-banking assets worth Rs 50.55 billion. In the last two months, banks and financial institutions have accumulated non-banking assets worth Rs 20.10 crore.
The average non-performing assets (NPL) of commercial banks stood at 4.44 percent in the current fiscal year. In the review year, non-banking assets of commercial banks stood at Rs 42.91 billion. As of mid-July of the previous fiscal year, commercial banks had non-banking assets worth Rs 42.77 billion.
Similarly, the average NPL of development banks stood at 5.03 percent as of mid-August of the current fiscal year. During the review period, development banks accumulated non-banking assets worth Rs 4.77 billion. As of mid-July of the previous fiscal year, the development banks had non-banking assets worth Rs 4.68 billion.
On the other hand, the NPL of finance companies has increased to 11.05 percent in the current fiscal year. The non-banking assets of the company stood at Rs 3.06 billion in the review period. Non-banking assets stood at Rs 3.09 billion as of mid-July of the previous fiscal year.
