The government is preparing to ease strict blacklisting provisions amid a sharp rise in loan defaults during the economic slowdown. Finance Minister Rameshwor Khanal and Nepal Rastra Bank acknowledge that the number of blacklisted borrowers—now approaching 200,000—has become unusually high, constraining credit and further weakening the investment climate. Industries argue that banks pushed distressed firms into blacklisting rather than offering post-pandemic restructuring, forcing many to shut down. Borrowers are currently blacklisted for missed payments, remaining out of contact, or issuing bounced cheques. Officials say relaxing the rules is necessary to revive lending, reduce financial risk aversion, and support economic recovery.
