Bad Loans of Banks: One in Details, Another in Reality!
▸ Part of: Nepal Rastra Bank Sets Daily Foreign Exchange Rates
An independent review of 10 major commercial banks in Nepal has revealed a significant gap between reported and actual non-performing loans (NPLs), with real NPLs reaching 7.6 percent compared to the reported average of 5.41 percent. This discrepancy raises concerns about banks hiding bad loans or misclassifying them to present a healthier financial picture. The review also indicated a decline in the capital adequacy ratio, weakening banks' risk-bearing capacity. Nepal Rastra Bank has acknowledged the report's findings and plans to implement suggestions to mitigate risks, emphasizing the need for banks to focus on actual loan recovery and quality improvement.
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