रोशनी तामाङ
Kathmandu. “If a person who has been an entrepreneur for 40 or 50 years is blacklisted on the basis of technical weakness, his entire business will be closed. He has been running his business for so many years by taking loans from banks. Due to the slight impact on the economy and his weaknesses in his financial planning, he may be able to exit the business. If the banks provide a little counseling, the borrower can survive,” said Mahaprasad Adhikari, Governor of Nepal Rastra Bank.
Governor Adhikari said this at an interaction program on contemporary topics in the banking sector organized by the Economic Media Society Nepal in the capital. More than half of the CEOs of commercial banks were listening as he said this. He suggested that banks should not blacklist borrowers due to technical weaknesses, targeting the CEOs and chairmen of banks.
Currently, Governor Adhikari is busy preparing for the final monetary policy review of his tenure. Through the second quarter review, Governor Adhikari has prepared a draft of monetary policy that will be convenient for both banks and borrowers. The bank is working as a bridge to reconcile the risk of entrepreneurs fleeing due to inability to repay loans and the banks that are accumulating non-banking assets due to inability to collect loans.
A NRB source said, “The problem of banks now is non-recovery of loans. If both banks and borrowers can feel comfortable by giving some concessions to good borrowers, then the NRB is looking for a solution. Similarly, discussions have also been held on the issue of asset management companies to manage non-banking assets.”
The NRB has been urging banks not only to provide loans but also to understand the difficulties faced by entrepreneurs and to provide loan counseling. The NRB is trying to be more flexible with monetary policy to protect both borrowers and banks in difficult times. The Governor Adhikari, who is in the last stages of his career, has stepped forward to protect both banks and entrepreneurs.
After good borrowers started getting blacklisted due to the financial crisis. The bank has taken new steps to protect both banks and borrowers. The bank is going to help blacklisted borrowers adopt some flexibility through monetary policy. For this, the bank is working on legal reforms.
It is expected that the amount of provision required by banks will also decrease when the law on blacklisting is amended. Nepal Rastra Bank had given some relief to construction entrepreneurs through the monetary policy of the fiscal year 2081/082. The National Bank had extended the repayment date of loans due to construction entrepreneurs by mid-Ashar to mid-Mangsir.
The inability of borrowers to repay loans taken from banks and financial institutions on time has also increased the burden of bad loans on banks. According to the second raw financial statement made public by banks, the average bad loans of banks have reached 4.49 percent, which is 1.09 percent more than the same period last year.
The increase in bad loans of banks has put the Chief Executive Officers (CEOs) of banks under stress. Bankers who were happy with mortgages until a few years ago have come under pressure from all sides after mortgage auctions stopped.
This year, the National Bank has set a target of 12 percent credit expansion. However, only 5 percent credit expansion has been achieved in the first six months of the current year. As liquidity in banks increases and banks are rapidly increasing their credit by finding new customers, bankers are focusing all their energy on recovering old loans, saying that they are unable to recover old loans.
Narendra Bank Governor Mahaprasad Adhikari has said that the job of banks is not only to provide loans. Governor Adhikari has said that it is also the duty of bankers to save the businesses of businessmen. Governor Adhikari has said that the National Bank is drafting a law to prevent good borrowers from being blacklisted easily.
Governor Adhikari has said that the law on blacklisting borrowers will be amended. Speaking at a program, he said that homework is being done to amend the law on blacklisting, saying that the tendency to blacklist borrowers as soon as they get into trouble will have a negative impact on the country’s business.
He has also suggested that banks should not blacklist borrowers if they are technically weak. He said, ‘Let’s say a customer is a person who has been an entrepreneur for 40 or 50 years. If he is blacklisted on the basis of his technical skills, everything will stop for him. He has been running his business for so many years by taking loans from the bank. Due to the slight impact on the economy and the weakness in his financial planning, he may be forced to exit the business. In such a situation, the banker has an important role. No, my job is not to give loans. Here, businessmen do not work according to a plan. There are those who do work after getting a job. If the banks provide a little counseling, that debtor can survive.’
According to a NRB source, the blacklist system maintained by the Credit Information Center will be slightly modified in the second quarter review. But the NRB has made it clear that such a system will work only for good debtors.
Recently, the number of people on the blacklist has increased. The number of people on the blacklist has increased after the debtors did not repay the loan despite repeated requests from the banks. If any bank or financial institution defaults on all loan facilities approved by it for more than 90 days, details of such loan facilities and the loan amount of Rs. 1 million or more will be blacklisted.
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