‘Need to deal with big defaulters’

Kathmandu, November 2:

Although the process of loan recovery at Nepal Bank Ltd (NBL) is going on, albeit rather slowly, concerned experts have stressed on dealing with the big defaulters effectively. Bharat Bahadur Karki, chairman and coordinator of NBL management team, while addressing a programme on ‘Internal Communication and Team Work: Agendas for Enhancing Performance of NBL’ said that the management team needs to deal with these big defaulters in a more professional manner to recover loans. He said that the problem of non-performing loans of about seven billion rupees is yet to be recovered even after four and quarter years of the management contract.

According to him, the progress in recovery shows that cash recovery of NPA stands at about Rs 5.2 billion, while restructuring has costed about Rs 2.4 billion. A handful of defaulters are yet to pay back about seven billion rupees loans to the bank, he disclosed. John E Fitzgerald, CEO of NBL, said that the bank management has completed the computerisation of its 44 main branches. He sa-id that the bank has recovered over Rs 7.49 billion in the last four years up-to the financial year ending mid-July 2006. In the last three years, the bank has made an operating profit and, in fiscal 2005-06, the bank has made a provisional net pro-fit of Rs 1.35 billion, he said.

Ken Ohashi, country director of the World Bank Nepal said that old anomalies in NBL have been removed following successful restructuring.

Alexander Pitt, IMF Resident Representative of International Monetary Fund, said that the conference on ‘Internal communication and teamwork: agenda for enhancing performance of NBL’ would help in improving the bank’s performance. He said that NBL’s net worth is still negative which is mostly due to defaulted bank loans. The governme-nt must rise to the challen-ge and step up its support in an effort to collect the debt owed to NBL, said Pitt.

Bijay Nath Bhattarai, governor of Nepal Rastra Bank said that the NBL management has been able to bring down the NPA level to 25 per cent from a whopping 60 per cent in 2003.