Non-performing loans in Nepali banks increased during the second quarter of FY 2082/83 (Saun–Pus), with the average NPL ratio rising to 5.07 percent from 4.48 percent a year earlier. Banks attributed the increase to weak economic activity and disruptions caused by the Genji strike, which affected loan recovery. Everest Bank reported the lowest NPL ratio at 0.68 percent, while Himalayan Bank recorded the highest at 7.96 percent. Although some banks improved recovery performance, overall credit expansion and loan collection remain sluggish. The International Monetary Fund has raised concerns over asset quality and required portfolio audits of major banks before releasing extended credit support.
