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Kathmandu, Nov 16: Over 15 per cent of industrialists and traders in Nepal have been blacklisted over banking offences, mostly linked to cheque bounce cases.

 Nepal Rastra Bank (NRB) data shows that more than 150,000 businesspersons face financial offence cases out of roughly 1 million operating enterprises in the country.

Speaking on Friday, NRB Governor Biswo Nath Poudel called the surge in blacklisting cases “unusual.” He noted that many entrepreneurs are struggling to repay bank loans amid an ongoing economic slowdown, worsened by the Gen Z movement and associated unrest.

Poudel explained that the criminalisation of cheque bounce incidents has contributed to the rise in blacklisting. The NRB has begun discussions to review loan loss provisions, which put pressure on banks to blacklist borrowers when loan repayments are delayed.

Unaudited financial reports from 20 commercial banks indicate their average non-performing loan (NPL) rate has climbed to 4.86 per cent, up from 4.04 per cent last year. Under NRB regulations, banks and financial institutions must maintain provisions ranging from 1 to 100 per cent of outstanding loans. Delays in repayment increase provisioning requirements, creating added pressure on banks to recover loans.

Highlighting the central bank’s flexible approach, Poudel said NRB is ready to implement policies suitable to the current economic context. He emphasised the importance of channelling loanable funds into rural areas to support economic activity and reduce pressures on the financial system.

People’s News Monitoring Service