KATHMANDU, April 4: Banks and financial institutions (BFIs) blacklisted as many as 3,942 individuals and firms on charge of defaulting loans during the eight and a half months of the current fiscal year from mid-July 2020 to March-end 2021, despite Nepal Rastra Bank (NRB)’s repeated direction for not blacklisting the firms failing to clear their loans due to COVID-19.
According to the records of the Credit Information Bureau (CIB), the blacklisted firms in the first eight and a half months of the current fiscal year have outnumbered the ones blacklisted in the entire last fiscal year. In 2019/20, the BFIs kept a total of 3,714 firms in their blacklists.
Recently, the cases of non-payment of the banks’ loans started to surge mainly after the government enforced a lockdown on March 24 last year to minimize the impacts of the pandemic. According to the CIB, 4,466 new firms were included in the blacklists in the past one year as loan defaulters.
Unveiling the mid-term review of the Monetary Policy 2020/21 in last February, NRB asked the banks not to blacklist the firms for being unable to clear their loans due to the pandemic. The NRB has also barred the BFIs from taking the assets of such firms into auction till mid-July even if they fail to pay their equal monthly installments.
The central bank enforced the rule after a number of banks started threatening the borrowers to make public their profiles in daily newspapers or to blacklist them as loan defaulters. However, the BFIs seem to be least bothered about the regulator’s directive.