As the fiscal year 2081/82 came to a close, banks across Nepal recorded significant improvements in loan recovery during the month of Ashad. This development has sparked optimism among bankers, who now expect the upcoming fourth-quarter financial statements to reflect improved financial performance. However, the official financial disclosures are yet to be published.
According to banking officials, internal indicators show signs of improvement compared to previous quarters. They are hopeful that this momentum will translate into a relatively positive financial position in the year-end report.
The improvement in loan recovery is largely attributed to policy flexibility adopted by Nepal Rastra Bank towards the end of the fiscal year. With strategic changes in regulations, overdue loan interest saw a notable decline of nearly 30 percent, easing repayment pressure on borrowers and strengthening banks’ recovery efforts.
Despite limited cooperation from local governments—particularly in processes such as issuing property recommendation letters, legal case handling, and enforcement of collateral auctions—banks were able to improve their collection figures. Bankers pointed out that the lack of local-level support remained a challenge throughout the year.
In Ashad alone, commercial banks disbursed approximately NPR 18 billion in loans. This figure is down from NPR 36 billion in the previous month of Jestha, reflecting a short-term slowdown. However, bankers remain confident that credit expansion will pick up again as the new fiscal year 2082/83 begins, thanks to the relaxed monetary policy in place.
Nepal Rastra Bank data shows that as of the end of Jestha, private sector credit had increased by NPR 407.62 billion (8%) compared to the same period last year. Experts suggest that falling interest rates, rising imports, growing share mortgage loans, and increased lending in the construction sector are all indicators that credit flow will continue to improve.
As for SPIL, the improved loan recovery environment could positively impact its upcoming Q4 financial report. Analysts believe this could lead to stronger earnings, lower non-performing assets, and improved operational efficiency.
