Kathmandu. Due to borrowers not paying principal and interest on time, bad loans of banks have increased. Such poor and bad loans are called non-performing loans (NPL). In one year, the non-performing loans of some banks have doubled. According to the financial statements of the commercial banks in operation up to the fourth quarter of the last financial year, the non-performing loan rate (NPL) has increased by 120 percent overall. (NPL) increased to 2.69 percent from 1.22 percent during the same period of the previous financial year. According to the report, the NPL of all the banks has increased, even the NPL of the banks that have gone to merger has increased excessively.

Kumari Bank has the highest number of NPLs. This rate, which was 1.11 percent till June last year, has now increased to 4.77 percent. This is an increase of 329 percent. Kumari and NCC Bank have merged and integrated business under the name of Kumari Bank. The amount of its provision has also increased a lot. As a result, the distributable profit of this bank is also negative. Similarly, the NPL of Himalayan Bank is second. Its said rate has reached 4.57 percent. The previous year was 1.59 percent. Himalayan Bank has recently acquired Civil Bank and started integrated business.

On the other hand, the non-performing loan rate of Nepal Investment Mega Bank, which has merged with Mega Bank, has also increased from 1.49 percent to 4.35 percent. Likewise, the NPL of Prabhu Bank, which merged with Century, has also increased from 1.86 percent to 4.16 percent.

The National Bank adopted a merger policy to control the opaque and unhealthy competition of banks and to strengthen them in terms of capital. But a closer look at the current situation shows that the situation of the merged banks is even more fragile. Their distributable profits are also very low when all the provisions are taken from the income. 5 banks are not even able to distribute dividends this year.

Bankers say that non-mobilization of new loans is one of the main reasons for the increase in NPL of banks. President of Nepal Bankers Association, Sunil KC said that due to the recent economic crisis, the lack of loan growth, the entrepreneurs should look at the increasing bad loan ratio as a matter of course. He said that although this rate of banks that have gone to merger is high, it is not affected by the big merger. He said that it cannot be said that the NPL has increased because of this. He said, "On the whole, the NPL of all banks has increased. If we look at the situation before the merger and after the merger, the provisions of both the merged banks were above. Therefore, it cannot be said that the NPL has increased due to the merger.