Kathmandu. Last fiscal year 2081. Bankers have been enthused by the significant improvement in loan recovery in June 2018. However, the financial statements for the last quarter are yet to be published.
Bankers say that the financial statements preparing for publication have improved slightly compared to the past. Bankers are hopeful that this will lead to some easing of the financial statements for the last quarter of the last financial year.
Some policy flexibility adopted by Nepal Rastra Bank at the end of the fiscal year has led to improvement in loan recovery. This will be easier in the coming months. Interest arrears have also decreased by around 30 percent at the end of the last fiscal year compared to the previous fiscal year. This has also made it easier to repay the loan.
The banks had faced non-cooperation from the local level to recover the loan. Bankers say that despite non-cooperation, the loan has been recovered.
Bankers complained that the local levels did not facilitate the problems of loan recovery, especially from home recommendations, activism in litigation and obstacles seen in the implementation of mortgage auction.
Commercial banks extended loans worth Rs 18 billion in June last year. The banks, which had focused on loan recovery, were confident that the loan expansion would also go ahead in June. However, credit flow did not improve. Loans worth Rs 36 billion were extended in May, while only Rs 18 billion were extended in June.
Bankers say that with the beginning of the current financial year, the expansion of credit will improve. For this, there has been a lot of flexibility in monetary policy. Bankers say that this will facilitate the expansion of credit.
However, according to nrb data, the credit expansion seems to be increasing till May of the last fiscal year. Loans from banks and financial institutions to the private sector increased by Rs 407.62 billion (8.0 per cent) as of May 2018.
Experts say that the flow of credit will increase as the bank’s interest rate has also been decreasing in recent times. They say that the economy will gradually return to normal. According to experts, indicators such as increase in imports, increase in share mortgage loans and increase in loans in the construction sector will also increase the credit.
