Kathmandu. Bad loans of commercial banks are now 2.70 percent. The fourth quarter financial report of the last financial year 2079/80 published by commercial banks in operation has shown this. By the end of June last year, the bad loan ratio of banks has decreased. Bad loans were projected to reach 5 percent by the end of June. However, during that period, such loans were seen to be under control.

Compared to the third quarter of last year, it is seen that banks have controlled bad loans in three months. According to the details, until the end of March, the average bad loan ratio of the banks was above 3 percent. However, by the end of June, it has decreased to 2.70 percent. As the end of June approached, the banks were more focused on debt recovery. In addition, the Central Bank also introduced a policy to reschedule and restructure loans in areas affected by the economic crisis. Banks say that the same reason has helped to reduce the bad loan ratio of banks.

However, the situation has not returned to normal. All debts have not been recovered. They say that due to this, the ratio of bad loans has not returned to normal. Especially due to the recent economic crisis, the loans of the banks could not be recovered. Due to the economic crisis, the business income of most of the sectors decreased. As a result, the ability of borrowers to pay their debts decreased. The ability of borrowers to repay their loans was also reduced due to high costs, high expenses, high interest rates, etc. As a result, they were not able to pay the loan installments and interest. Due to this, the bad loans of the banks automatically increased. If the borrower does not pay the loan amount and interest for 6 months, such loan will be classified as bad loan.

Bad loans of Everest Bank and NIC Asia Bank were less than 1 percent last year. During the review period, such debt of Everest has remained zero.79 percent. On the other hand, NIC Asia's bad loans are also zero.80 percent.

According to the financial statement, bad loans of 5 banks are above 4 percent. Bad loan ratio of Kumari Bank is the highest in the year under review. By the end of June, bad loans of Kumari Bank reached 4.77 percent. Himalayan Bank's bad loans are 4.57 percent. Nepal Investment Mega Bank, ranked third, has a bad loan ratio of 4.35 percent. Similarly, Prime has a bad loan ratio of 4.23 percent and Prabhu Bank has a bad loan ratio of 4.16 percent.