KATHMANDU, Aug 12: Nepal Rastra Bank (NRB), in a bid to carry out full auditing of loan portfolios as per the recommendation of the International Monetary Fund (IMF), has selected 10 large banks based on their financial health as of mid-April this year.
Global IME Bank, Nabil Bank, Nepal Investment Mega Bank, Rastriya Banijya Bank, Kumari Bank, Laxmi Sunrise Bank, Prabhu Bank, Nepal Bank Limited, Himalayan Bank and NIC Asia Bank are among the commercial banks to be taken for the full financial audit, according to the NRB. The central bank has already selected Bangladeshi audit firm Howladar Yunus & Co. to assess the loan quality of these Nepali banks.
Lending slows as banks focus on recovery of loans at fiscal yea...
Roshan Kumar Sigdel, executive director of the NRB, informed that the central bank is set to sign an agreement with the Bangladeshi consulting firm by the end of this week. According to him, the Bangladeshi firm will be given three months’ time to complete the loan portfolio review of the selected banks.
The IMF had put forth the condition of auditing the 10 large commercial banks while approving its fourth installment amount to Nepal under Extended Credit Facility (ECF). During the COVID-19 pandemic, the IMF Executive Board approved a concessional loan of USD 398.8 million to Nepal under the ECF, scheduled over four years starting from mid-January 2022.
“Bank asset quality in Nepal has deteriorated, reflecting a decline in the repayment capacity of borrowers due to higher lending rates and rising leverage, a concern that is moderated by banks’ capital-adequacy ratios that are above the regulatory minima,” the IMF said in the statement issued in February 2023.
