Bad loans on road to recovery: Banks recover Rs 500m from willful defaulters

A significant amount of bad loans have been recovered from willful defaulters in the last four months. The Willful Defaulter Action Monitoring Committee of the government has recovered bad loans worth Rs. 500 million during this period. "Bad loans worth Rs. 500 million have been recovered after the committee started its work," said Hari Roka, coordinator of the committee. "The defaulters have shown commitment to pay back additional Rs. 1.5 billion."

The then Maoist-led government had formed the committee in the second week of February and appointed lawmaker Hari Roka as its coordinator. The committee was formed in order to monitor and expedite legal action against willful defaulters. Other members in the committee are deputy governor of Nepal Rastra Bank (NRB), joint secretary of the Finance Ministry, chairman of the Bankers Association and NRB´s chief of the Department of Supervision. The then government had decided to impose a ban on transactions of willful defaulters' properties, restrict them from operating businesses and seize their passports. It had initiated action against at least 238 willful defaulters who owe more than Rs. 10 million each.

In the last four months, nine defaulters have started paying back their loans to their banks. Among them are Chandi Raj Dhakal, former president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Jamim Shah, owner of Space Time Network, Prakash Chandra Shrestha of Dimpu Pinku Group and Bhaskar Sharma of Asian Fashion. Also in the list are Piyush Bahadur Amatya of the Fulbari Resort and Birendra Kanaudiya of Mahalaxmi Sugar Mills. Dhakal has paid Rs. 15 million to Rastriya Banijya Bank (RBB) and Rs. 30 million to Nepal Bangladesh Bank (NBB). He has made commitment to pay Rs. 15 million to RBB within the second week of October and has even submitted two post-dated cheques.

Likewise, Jamim Shah has paid Rs. 19.2 million to RBB and NBB. Till date, Amatya of the Fulbari Resort has paid Rs. 112.6 million to Nepal Bank Limited (NBL) and Himalayan Bank. Kanaudiya, a former lawmaker, has paid Rs. 107.2 million to RBB. Owner of Mahlalaxmi Sugar Mill, Kanaudiya has been removed from the blacklist after he started repaying his bank loans to RBB. Along with Kanaudiya, eight defaulters have been delisted from the blacklist. Among them are owners of Bhairahawa-based Mahendra Sugar Mill and minor promoter of Luna Fertilizer Factory, Dibas Bikram Shah. Mohan Bahadur Shahi, Gopal Bahadur Shahi and Prakash Bahadur Shahi of Himalayan Brewery have also been delisted after they paid back their loans including both principal and interest amounting to Rs. 110 million to RBB.

Of late, the willful defaulters have started contacting their banks after the government started tightening the screw against them. The other reason behind the defaulters showing an interest in restructuring their loans is the rising price of land. "The defaulters are now showing an interest to pay back their loans as the price of land has increased," said Roka. According to the Roka committee, 17 defaulters have submitted applications to the committee to restructure their loans. Likewise, eight defaulters have contacted RBB.
Source: Kantipur