Lumbini, NBB, SBI drag more loan defaulters to Debt Recovery Tribunal

KATHMANDU, DEC 21 -

Lumbini Bank, Nepal Bangladesh Bank (NBB) and Nepal SBI Bank have forwarded more loan default cases to the Debt Recovery Tribunal (DRT) than their peers as of last week.

Of the 31 cases registered at DRT this fiscal year, Lumbini topped the charts with 19 cases, followed by Nepal Bangladesh Bank (7) and Nepal SBI bank (6). Last year, 58 cases were registered at DRT.

However, in terms of the loan amount associated with the cases, NBB has the highest—Rs 320.16 million. Lumbini comes second with Rs 283.91 million followed by Nepal SBI with Rs 4.59 million.

Bank of Kathmandu and Agriculture Development Bank have two cases each registered at DRT. NMB Bank, Gorkha Finance and now liquidated Nepal Development Bank have one case each.

According to a senior official at Lumbini, almost all their cases registered at DRT are related to the bank’s former promoter group led by Binod Bahadur Amatya, which played crucial role in the bank’s downfall.

After the Nepal Rastra Bank (NRB) took over Lumbini’s management, the new management led by Chief Executive Officer Sobhan Dev Pant recovered most of the loans taken by the former promoter group. “Other default cases, in which collateral is not sufficient for recovery, have been sent to DRT,” said the official.

Amatya himself and his firms, including Bakra Tunda Trading House, Everest Diamond, Shree Binni Foods Industries, Amatya Enterprises, Mount Everest Brewery, The General Trading and Engineering, have been named defendant in the case.

In NBB’s case, a bank official said it was natural to see some cases going to DRT as the bank has relatively higher bad loans. As of first quarter of the current fiscal year, the bank’s non-performing loan (NPL) level stands at 18.62 percent. The biggest defaulter it dragged to DRT is Prabha Apparel, which owes Rs 165.4 million to the bank.

Most of the cases that Nepal SBI registered at DRT have loan amounts worth Rs 1 million or less. “Most of the SBI’s cases are related to hire purchase loans,” said a DRT official, adding that individuals have been made defendant in such small defaults.

However, with banks facing difficulties in recovering real estate loans, the DRT official expects more cases from the sector in future. As of now, only two cases related to real estate have been registered at the DRT.

They are CDND Housing that took Rs 28.5 million from Lumbini and Morang Housing and Properties that received worth Rs 41.4 million from NBB, according to DRT.

Source: Kantipur