Despite the fact that the economy suffered huge losses due to the pandemic caused by COVID-19, the banking sector stood tall in such dire circumstances.
In the last FY, a huge number of borrowers have default their payments, and banks have failed to recover interest and principal due to the pandemic, however, the NPL of the commercial banks has declined an average of 0.38 percent in the fourth quarter.
The banks have given additional time to borrowers to make repayment per the directive of NRB. The banks have also rescheduled and restructured loans affected by COVID-19 which have kept their provisioning in the line.
However, the provision increased in the fourth quarter due to the NRB directive to maintain 0.30 percent provision in performing loans.
In the last FY, Prabhu Bank logged the highest decline in non-performing loans. The NPL of the bank declined by 1.47 percent while, the NPL of Nepal Bangladesh Bank declined by 1.34 percent. Similarly, the NPL of Civil Bank, NCC Bank and Agriculture Bank also declined by above 1 percent.
Meanwhile, the NPL of Citizens Bank increased the highest during the period. The NPL of the bank increased by 1.22 percent.
