KATHMANDU: The Nepal Bankers Association (NBA) engaged in discussions concerning the recent directives by the Central Bank regarding the auctioning of mortgages and the blacklisting of borrowers.
Gyanendra Dhungana, the outgoing president of the association, revealed that an informal meeting was convened on Sunday to address these concerns.
Bankers have expressed dissatisfaction with NRB’s new regulations regarding mortgage auctions and borrower blacklisting, foreseeing potential challenges in loan recovery and an increase in non-performing assets.
Ashok Shumsher Rana from Himalayan Bank, also an advisor to the Bankers’ Association, highlighted that the NRB’s recent instructions have compounded issues amid ongoing challenges in loan recovery.
He mentioned an informal discussion with the Governor of the Central Bank on this matter and stated the Association’s intentions to arrange a formal dialogue.
Rana clarified that while a decision on the implementation timeline for the current guidelines is pending, delaying their enforcement until the financial system’s debt recovery issues are addressed could be more feasible.
He further stressed the difficulty banks might face in immediate compliance with these guidelines, emphasizing the need for potential amendments or a revised implementation strategy.
The NRB’s recent instructions stipulate that before blacklisting a guarantor, the mortgage secured by the borrower must undergo auctioning for recovery. If the retrieved amount from the collateral is insufficient to cover the outstanding debt, the guarantor must be provided a 90-day window for payment, extended from the earlier 35-day period, before blacklisting ensues.
Additionally, in a new arrangement, joint ventures (J.V.) will not mandate the blacklisting of other firms/companies involved, a departure from previous protocols.
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