Effective management must to control bad debts

Governor of the Nepal Rastra Bank (NRB) Deependra Bahadur Chhetri has said that the NRB had to interfere on the Nepal Development Bank (NDB) as it didn’t show seriousness even after frequent efforts to correct it.

At an interaction organised here Monday, he said as the NRB is a monitoring body, it has to make the depositors and the investment of the shareholders safe, and informed that still two weeks has been given to it to improve, and if it improves its management in this period, the decision can be reconsidered.

The bad debtors are encouraged because of the political instability, he said, adding defaulters of more than Rs. 10 million are listed as large defaulters and they will be taken action if they do not come to pay loans even after giving them opportunity.

The interaction on ‘Policies on recovery of bad debts of the banks’ was organized by ‘Aikyabaddhata’ monthly.

The speakers of the interaction said those leading in politics, those with high prestige in society and economically prosperous had been defaulting and had caused the whole economy to collapse, not only the banking sector.

Vice Chairman of the Bankers Association Anil Shah said banks should make their management efficient so as not to create bad debts.

Jhapat Singh Bohora of the Nepal Development Banks Association said the financial situation of the banks had declined because of the big debtors and not because of micro or medium scale loans.

Employees Provident Fund Deputy Administrator Ramesh Kumar Bhattarai said the bad debts had increased because of the lack of far-sightedness of the NRB and it should be serious in the days ahead.

CEO of the Agricultural Development Bank Janaklal Shaha said the bad debt increased as banks invested with negligence in any projects.

Chairman of the Debt Recovery Tribunal Gokul Burlakoti said although the tribunal has only decided half of the 315 petitions filed, it has made its works prompt in recent days.
Source: gorkhaptra.org