सिंहदरबार संवाददाता
Kathmandu. Former banker Analraj Bhattarai said that it is necessary to separate provisions and bad loans to solve the problem of increasing bad loans in banks. He made this allegation at an orientation program organized by the Nepal Association of Economic Journalists (NAFEJ) on Monday.
‘When 42 percent of Karnali Bank’s bad loans were seen, the National Bank had to take them under control. Where were the auditors and regulators until then?’ Bhattarai said, ‘The bank’s bad loans did not increase by 42 percent in a single day. It has been happening every year. This has happened due to weaknesses from management to regulators.’
According to him, 89 percent of the banking sector’s loans are secured by property. 66 percent are secured by real estate. Property-backed loans have increased. In others, it is decreasing.
Pointing out that banks are currently facing two problems, he said, “First, there is the problem of increasing bad loans and capital tightening. There is a problem of not taking loans. Liquidity is piling up. But the banks are not willing to lend and the borrowers are not willing to take loans. We are currently in a credit crunch. If there was a lack of liquidity in the banks, the bank’s profit, which was made public today, would not have been above 4.9.”
He claims that if we can separate the provisioning and bad loans of banks, the problems seen in the economy can be solved. “Where bad loans are about to reach 8 percent in banks, we can resolve them. 8 percent bad loans in banks. If banks reach 8 percent bad loans, what should be done with provisioning?’ he asked.
According to him, if the bank is unable to recover the loans given at any time, banks should write off 100 percent of the expenses in the profit and loss account. Dividends cannot be given to shareholders. Due to the situation of the bank, profits could not be distributed.
This year, banks have set aside provisions of Rs 31 billion. He said that the profit received by shareholders and the tax received by the government from the provision of Rs 267 billion compared to the previous year has also been affected.
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