Although a huge number of loan defaulters have not paid their debt on the backdrop of the ongoing pandemic, the NPL of banks has not risen due to the amenities provided by Nepal Rastra Bank (NRB).
As per the second-quarter report published by the banks, the average NPL of the banks is at 1.15 percent. the NPL declined by 0.50 percent compared to 1.65 percent of the corresponding period of the last FY. In comparison to the last FY, NPL of 21 banks has declined while of 6 banks have increased. meanwhile one has stable NPL.
NRB allowed banks to extend the deadline of loan defaulters. also, the central bank allowed the banks to reschedule and restructure the loans of those defaulters badly affected by the pandemic. This has played a crucial role in limiting the NPL at this level. the NRB amenity also helped the banks to maintain low provisions.
As per the data, Siddhartha Bank logged the highest decline in NPL by 1.54 percent during the period followed by Rastriya Banijya Bank, Standard Chartered Bank, NCC Bank and Agriculture Development Bank.
As per the bankers, recovery of bad debt helped the banks not only bring down their NPL but also increase their net profit. the report shows that those banks which recovered huge bad debt also logged impressive growth in net profit. although interest income is the main income source for the banking industry, income from other operating income, fee commission, recovery of bad debt also pull the net profit up.
During the period, NPL of 11 banks decreased below 1 percent. Nepal SBI has the lowest NPL of 0.14 percent. in the meantime, Rastriya Banijya Bank has the maximum NPL of 3.06 percent.
