KATHMANDU: Four major associations representing Nepal’s banking and financial sector have raised concerns over local governments’ lack of cooperation in the loan and credit recovery process.
In a joint statement issued Thursday, the Nepal Bankers’ Association, Development Bankers’ Association Nepal, Nepal Financial Institutions Association, and Nepal Microfinance Bankers’ Association said that local bodies are either refusing or deliberately delaying the issuance of key documents needed for auctioning collateral, making it increasingly difficult for banks and financial institutions to recover defaulted loans.
“Recently, local governments have not been cooperating with banks, financial institutions, and microfinance institutions during the loan recovery process,” the statement reads. “In particular, local bodies are denying recommendation letters for property access and, when compelled to issue them, do so with significant delays.”
This has obstructed legal recovery efforts, the statement adds, posing a serious threat to the country’s financial stability.
The associations also raised alarm over rising threats and intimidation faced by staff engaged in debt recovery, including reports of verbal abuse, threats, and physical attacks in some areas. They warn that these issues are impacting staff morale and could further derail recovery operations.
Highlighting the importance of financial discipline for economic resilience, the groups called on the federal and local governments to address these challenges urgently.
“We urge all concerned authorities and stakeholders to seriously consider this matter in the spirit of federalism and ensure necessary support from local officials. We also draw attention to the need for peace and security during the execution of lawful recovery efforts,” the statement concluded.
Comment