KATHMANDU, JULY 12

Stating that the fiscal year is coming to an end, banks and financial institutions have been pressuring borrowers to clear loan instalments and interest pertaining to the last four months.

Though businesses have been shut and salaries have not been paid for months, BFIs have been constantly making phone calls and messaging borrowers to clear all their dues by mid-July.

The banks' move to pressure borrowers is based on the government decision to defer loan and interest payment for the lockdown period till mid-July.

However, borrowers say they are not in a position to clear the dues at one go as they are just resuming their businesses. They have urged the government to extend the loan and interest payment deadline.

“Businesses have gradually started resuming operations after the government eased the lockdown. However, no business has reached pre-lockdown level due to several factors, including lack of raw materials and market,” said Kamalesh Agrawal, vice president of the Confederation of Nepalese Industries, adding that clearing dues in such circumstances is impossible.

Not only businesses but even small borrowers are at their wits end after banks started making repeated calls asking them to deposit due instalment and interest.

“It is through salary that we pay our instalment. However, our salaries have been delayed for months,” said a borrower on condition of anonymity.

Not only are banks pressuring borrowers to deposit dues, but are also deducting instalment from borrowers’ loan account without their consent.

Bankers refuted the charge that they were pressuring borrowers to clear dues.

“However, it is the responsibility of banks to ask borrowers to pay dues and even the government’s deadline to clear due is till mid-July,” said Bhuwan Dahal, chief executive officer of Sanima Bank and president of Nepal Bankers' Association — the umbrella organisation representing the country's 27 commercial banks.

Meanwhile, Nepal Rastra Bank has urged bankers not to force borrowers to repay loans and deposit due amount. “While borrowers who are in a position to clear dues should do that. Banks should not force other borrowers to deposit all dues now,” said Gunakar Bhatta, spokesperson for NRB.

According to him, the Monetary Policy for fiscal 2020-21, which will be brought within this month, is likely to extend loan repayment and interest payment deadline.

A version of this article appears in e-paper on July 13, 2020, of The Himalayan Times.