KATHMANDU, May 27: Banks have not yet returned the interest raised by increasing the premium on loans contrary to the instructions of the Nepal Rastra Bank (NRB).
Commercial banks frequently change and increase the premium rate of interest on loans provided to customers, according to the 61st annual report of the Office of the Auditor General.
Revised interest rate corridor system introduced
On October 27, 2022, the NRB’s Supervision Department instructed the banks which had charged higher interest by increasing the premium to return the collected excess interest. At that time, the 25 commercial banks in operation had been instructed to return Rs 4.66 billion to the respective borrowers for charging higher interest rates.
It is mentioned in the report of the Office Of Auditor General that the banks have only partially refunded the interest as per the instructions of the NRB. The report also mentioned that due to the higher premium rates taken by banks and financial institutions, the prices of goods and services consumed by the general public, the profits of banks and financial institutions and the income tax revenue would also be affected.
The Office Of Auditor General has pointed out that in the monitoring of banks and financial institutions, the matter related to the premium rate taken on loans should be included in the monitoring report of all banks and financial institutions and action should be taken.
