Credit card loans have emerged as the most stressed segment in Nepal’s banking system, with non-performing loans reaching 18.27 percent by mid-October 2082, according to Nepal Rastra Bank. Overdraft loans followed with an NPL ratio of 10.46 percent, both significantly higher than the sectoral average of 5.26 percent. Bankers attribute the high default rate to steep monthly interest charges of around 2.5 percent, unsecured lending, and compounding interest that often exceeds the original loan amount. The migration of skilled professionals abroad has further weakened recovery prospects. NRB data also indicate elevated NPL levels in working capital and hire-purchase loans, while margin lending remains the least risky loan category.
