January 28: While businesses have been struggling due to the impact of Covid-19, most commercial banks have reduced their bad loans. By the second quarter of the current Fiscal Year (FY) 2078/79, most of the 27 commercial banks have succeeded in reducing their bad loans.

Out of the 27 commercial banks, 21 banks have succeeded in reducing bad loans. Siddhartha Bank Limited has become the most successful bank in reducing bad loans. Compared to the second quarter of the last fiscal year 2077/78, the bank has reduced bad loans by 1.54 points in the second quarter of the current fiscal year. By the second quarter of the current fiscal year, the non performing loan (NPL) ratio of this bank has come down to 0.37 percent. The bank's non-performing loans stood at 1.91 percent in the second quarter of last year.

Himalayan Bank Limited is in the second place in reducing bad loans. Compared to the second quarter of last year, the bad debt of this bank has decreased by 1.41 points and has remained at 0. 72 percent till the second quarter of the current fiscal year. Rastriya Banijya Bank, which is in the third position to reduce bad loans, has managed to reduce by 1.17 points in the second quarter of the current fiscal year compared to the second quarter of the last fiscal year. The NPL ratio of the bank stood at 3.6 percent in the second quarter of the current fiscal year.

As of the second quarter of the current fiscal year, three government-owned commercial banks are in the top spot in terms of bad loans. Rastriya Banijya Bank is in the first place, Agriculture Development Bank is in the second place, and Nepal Bank Limited is in fourth place.

Private sector-run Nepal Investment Bank is in third place with the worst bad loans.

Rastriya Banijya Bank's non-performing loans stood at 3.6 percent in the second quarter of the current fiscal year. Similarly, the bad loan of Agriculture Development Bank is 2.8 percent, Nepal Investment Bank (2.06 percent), and Nepal Bank (1.91 percent). Bad loans of 15 commercial banks are above 1 percent. Three of them have bad debts of more than 2 percent.

Nepal SBI Bank has the lowest bad loans at 0.14 percent as of the second quarter of the current fiscal year. Similarly, Everest Bank is in second place, and Sanima Bank stands third.

As of the second quarter of the current fiscal year, the non-performing loans (NPLs) of Everest Bank stood at 0.26 percent and Sanima Bank at 0.31 percent.

While most of the commercial banks were able to reduce bad loans during the review period, Nabil, Sunrise, Laxmi, NIC Asia, and Everest Bank were unable to do so.