A loan portfolio review conducted by Bangladesh-based Howlader Yunus & Company has found that Nepal’s 10 largest commercial banks have an average non-performing loan (NPL) ratio of 7.7 percent. Submitted to Nepal Rastra Bank, the review revealed that two banks had NPLs exceeding 10 percent, with one reaching 11 percent, while the lowest stood at 4 percent. The report flagged issues such as loan evergreening, overstated financial projections, inconsistent collateral valuation and improper classification of bad loans. It also found that some banks, including Himalayan and Rastriya, failed to meet minimum capital requirements, while four others fell short on primary capital ratios. NRB has said banks will be given the opportunity to respond before corrective measures are taken.
