Due to weak implementation of the verdict of the Debt
Recovery Tribunal (DRT), 25 banks and financial institutions (BFIs) are yet to
recover loans worth Rs 13.09 billion from defaulters. The amount is related to
DRT officials said the amount rose to such a high level due
to accumulation of cases in which loans could not be recovered. The amount,
however, may go up further as interests until the period of recovery should
also be added as per the Act on Recovery of Debts of Bank and Financial
Institutions, they said.
Although the Act has stated that loan recovery officers
should recover the amount and hand it over to BFIs concerned within a specified
period fixed by the tribunal, loans have not been recovered for a long even
after the DRT verdict.
Loan recovery officer Indra Dhungana cited `multiple
practical problems' for the failure to recover bad loans. "In some cases, BFIs
fail to show the property put up as collateral," said Dhungana, adding,
sometimes banks themselves do not cooperate with the debt recovery officer,
citing time constraints.
As there are a huge number of cases, said the officer, the
provision of a single loan recovery officer has also delayed recovery. "In
other cases, loan defaulters move other courts with unrelated cases against
loan recovery such as property and business transaction feud. And, the courts
stay the auction of the collaterals, delaying the recovery," Dhungana said.
In a recent case, Ujjwol Kumar Karki of Bhuwaneshwori,
Sindhuli, who purchased a piece of land owned by a loanee of NIDC Capital
Market Govinda Prasad Shrestha at an auction made by the DRT, was not able to
transfer the land in his name. The Kathmandu District Court had stopped the
transfer of the land after Shrestha's family members filed a case of property
feud in the court. However, the same court ruled in favour of Karki a few days
In another case, Mahantha Prasad Kushwaha of Birgunj has not
been able to use the land he purchased at a DRT auction. The land initially
belonged to Rastriya Banijya Bank's loanee Sumitra Kumar Devi.
"People usually are reluctant to purchase property at DRT
auction to avoid any possible court battle," said Kiran Kumar Shrestha, acting
general manager at Nepal Bank Limited (NBL). NBL has Rs 1.63 billion related to
120 cases to be recovered.
DRT statistics show state-owned Rastriya Banijya Bank (RBB)
has the highest amount to be recovered (Rs 5.03 billion related to 219 cases),
followed by other state-owned banks Agriculture Development Bank (Rs 3.96
billion) and NBL (1.63 billion).
Among private sector banks, Nepal Bangladesh Bank has the
largest amount of Rs 804 million to be recovered.