{"id":1345,"date":"2025-08-28T07:18:12","date_gmt":"2025-08-28T07:18:12","guid":{"rendered":"https:\/\/english.bankingkhabar.com\/?p=1345"},"modified":"2025-08-31T09:24:06","modified_gmt":"2025-08-31T09:24:06","slug":"bad-loans-rise-seven-development-banks-including-sangrila-at-risk","status":"publish","type":"post","link":"https:\/\/english.bankingkhabar.com\/?p=1345","title":{"rendered":"BAD LOANS RISE, SEVEN DEVELOPMENT BANKS INCLUDING SANGRILA AT RISK!"},"content":{"rendered":"

\"\"<\/a>Banking Khabar\/<\/strong> In recent years, Nepal\u2019s financial market has been under continuous pressure. Particularly, development banks have been further deteriorating as they lose the trust of investors and depositors. Some time ago, the Karnali Development Bank scandal further eroded public confidence in development banks. The main challenge for development banks is the contraction in loan disbursement. Development banks have not been able to mobilize loans effectively. On the other hand, the share prices of most development banks listed on the Nepal Stock Exchange (NEPSE) have been continuously declining.<\/p>\n

Some banks, despite disbursing loans at interest rates of 14\u201315 percent, have been unable to recover those loans, which has led to a surge in non-banking loans. This has created further pressure on the financial health of the banks. Development banks have been trapped between commercial banks and microfinance institutions. As large commercial banks have expanded their branches even in rural areas, the existence of development banks has come under deeper crisis.<\/p>\n

Meanwhile, microfinance institutions have been providing cheap and efficient services in rural areas, causing development banks to lose their traditional market. Nepal Rastra Bank\u2019s pressure on capital increment, mergers, and acquisitions has further made development banks uncomfortable. Development banks unable to raise sufficient capital are struggling to survive.<\/p>\n

Condition of Some Development Banks<\/strong><\/p>\n

At the end of FY 2080\/81, the average non-performing loans (NPLs) of development banks stood at 6.65 percent, which increased to 8.46 percent in the last fiscal year 2081\/82. Within a year, this represents a rise of 1.81 percent. In FY 2078\/79, the NPL of development banks was only 2.06 percent. In FY 2079\/80, it rose to 4.58 percent. Similarly, in FY 2080\/81, the growth of NPLs accelerated, reaching 6.65 percent. In the last fiscal year 2081\/82, it further increased to 8.46 percent.<\/p>\n

Development Banks with High NPLs<\/strong><\/p>\n

Narayani Development Bank
\nAmong development banks, Narayani Development Bank\u2019s non-performing loans have skyrocketed. In the last fiscal year, its NPLs exceeded 50 percent. In FY 2078\/79, it was only 2.94 percent. In 2079\/80, it reached 18.4 percent. By FY 2080\/81, the NPL nearly doubled to 35.21 percent, and in 2081\/82, it increased further to 50.97 percent. This sharp rise in NPLs has affected its net profit. The net profit declined by NPR 17.8 million in FY 2080\/81, while in FY 2081\/82, it decreased by NPR 25.1 million. Compared to the previous fiscal year, this is a 41.40 percent decline.<\/p>\n

Corporate Development Bank<\/strong>
\nAmong banks with high bad loans, Corporate Development Bank\u2019s NPLs have increased significantly. In the last fiscal year, its NPLs rose to 12.38 percent, which is more than double compared to 5.91 percent in the previous fiscal year. Earlier, in FY 2079\/80, the NPL was 4.29 percent and in 2078\/79, it was 4.65 percent. Rising NPLs have also negatively affected the bank\u2019s profit. In the last fiscal year, the bank\u2019s profit declined by NPR 16.3 million. While the net profit had increased by NPR 20 million in the previous fiscal year, it fell by 181.15 percent this year.<\/p>\n

Jyoti Development Bank<\/strong>
\nJyoti Development Bank\u2019s NPL reached 7.98 percent, which is significantly higher compared to 4.95 percent in the previous fiscal year. In 2078\/79, the NPL was 1.42 percent; in 2079\/80, 3.09 percent; and in 2080\/81, 4.95 percent. Likewise, while the bank had earned a net profit of NPR 170.5 million in the previous fiscal year, it experienced a decline of 92.74 percent in net profit during the last fiscal year.<\/p>\n

Excel Development Bank<\/strong>
\nExcel Development Bank also has a high level of non-performing loans. In FY 2081\/82, NPLs reached 6.71 percent, slightly higher than 6.18 percent in the previous year. Earlier, in 2078\/79, it was 2.79 percent, and in 2079\/80, it was 4.88 percent. A slight decline in profit was observed. The net profit, which was NPR 43.4 million in the previous fiscal year, fell to NPR 40.9 million in the last fiscal year, a decline of 5.96 percent.<\/p>\n

Sangrila Development Bank<\/strong>
\nSangrila Development Bank\u2019s NPLs have been continuously rising. In the last fiscal year, NPLs reached 5.64 percent, compared to 4.08 percent in the previous fiscal year. In FY 2078\/79, bad loans were 0.98 percent, and in 2079\/80, they increased to 3.06 percent. However, the bank\u2019s net profit has increased. In FY 2080\/81, the net profit was NPR 504.2 million, which increased to NPR 537 million in FY 2081\/82, representing a 6.51 percent rise.<\/p>\n

Mahalaxmi Development Bank<\/strong>
\nMahalaxmi Development Bank\u2019s NPLs reached 4.86 percent in the last fiscal year, higher than 4.58 percent in the previous year. In FY 2078\/79, it was 2.95 percent, which rose to 6.51 percent in 2079\/80. A slight growth in profit was observed. In FY 2080\/81, the profit stood at NPR 500.3 million, which increased to NPR 506.6 million in 2081\/82, a growth of 1.26 percent.<\/p>\n

Lumbini Development Bank<\/strong>
\nLumbini Development Bank\u2019s NPLs reached 4.55 percent, higher than 3.29 percent in the previous year. In FY 2078\/79, it was 1.68 percent, which rose to 3.01 percent in 2079\/80. Its profit, however, saw a significant decline. In the previous fiscal year, the bank earned a net profit of NPR 543.6 million, but it decreased to NPR 379.8 million in the last fiscal year, a drop of 30.13 percent.<\/p>\n

Shine Resunga Development Bank<\/strong>
\nShine Resunga Development Bank\u2019s NPLs reached 4.24 percent, higher than 3.43 percent in the previous fiscal year. In FY 2078\/79, the NPL was 0.96 percent, and in 2079\/80, it was 1.81 percent. The bank\u2019s net profit has slightly increased. In FY 2080\/81, the net profit stood at NPR 685.3 million, which rose to NPR 688.6 million in FY 2081\/82, reflecting a 0.48 percent increase.<\/p>\n","protected":false},"excerpt":{"rendered":"

Banking Khabar\/ In recent years, Nepal\u2019s financial market has been under continuous pressure. Particularly, development banks have been further deteriorating as they lose the trust of investors and depositors. Some time ago, the Karnali Development Bank scandal further eroded public confidence in development banks. The main challenge for development banks is the contraction in loan […]<\/p>\n","protected":false},"author":1,"featured_media":1346,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,3,11],"tags":[],"class_list":["post-1345","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking-khabar","category-main-news","category-profile"],"yoast_head":"\nBAD LOANS RISE, SEVEN DEVELOPMENT BANKS INCLUDING SANGRILA AT RISK! - Bankingkhabar<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/english.bankingkhabar.com\/?p=1345\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BAD LOANS RISE, SEVEN DEVELOPMENT BANKS INCLUDING SANGRILA AT RISK! - Bankingkhabar\" \/>\n<meta property=\"og:description\" content=\"Banking Khabar\/ In recent years, Nepal\u2019s financial market has been under continuous pressure. Particularly, development banks have been further deteriorating as they lose the trust of investors and depositors. Some time ago, the Karnali Development Bank scandal further eroded public confidence in development banks. The main challenge for development banks is the contraction in loan […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/english.bankingkhabar.com\/?p=1345\" \/>\n<meta property=\"og:site_name\" content=\"Bankingkhabar\" \/>\n<meta property=\"article:published_time\" content=\"2025-08-28T07:18:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-08-31T09:24:06+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/english.bankingkhabar.com\/wp-content\/uploads\/2025\/08\/Final-bikash-bank.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"903\" \/>\n\t<meta property=\"og:image:height\" content=\"518\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/english.bankingkhabar.com\/?p=1345\",\"url\":\"https:\/\/english.bankingkhabar.com\/?p=1345\",\"name\":\"BAD LOANS RISE, SEVEN DEVELOPMENT BANKS INCLUDING SANGRILA AT RISK! - Bankingkhabar\",\"isPartOf\":{\"@id\":\"https:\/\/english.bankingkhabar.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/english.bankingkhabar.com\/?p=1345#primaryimage\"},\"image\":{\"@id\":\"https:\/\/english.bankingkhabar.com\/?p=1345#primaryimage\"},\"thumbnailUrl\":\"https:\/\/english.bankingkhabar.com\/wp-content\/uploads\/2025\/08\/Final-bikash-bank.jpg\",\"datePublished\":\"2025-08-28T07:18:12+00:00\",\"dateModified\":\"2025-08-31T09:24:06+00:00\",\"author\":{\"@id\":\"https:\/\/english.bankingkhabar.com\/#\/schema\/person\/8d2633fe06a785fdda1bb1cbdd6f0fde\"},\"breadcrumb\":{\"@id\":\"https:\/\/english.bankingkhabar.com\/?p=1345#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/english.bankingkhabar.com\/?p=1345\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/english.bankingkhabar.com\/?p=1345#primaryimage\",\"url\":\"https:\/\/english.bankingkhabar.com\/wp-content\/uploads\/2025\/08\/Final-bikash-bank.jpg\",\"contentUrl\":\"https:\/\/english.bankingkhabar.com\/wp-content\/uploads\/2025\/08\/Final-bikash-bank.jpg\",\"width\":903,\"height\":518},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/english.bankingkhabar.com\/?p=1345#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/english.bankingkhabar.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"BAD LOANS RISE, SEVEN DEVELOPMENT BANKS INCLUDING SANGRILA AT RISK!\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/english.bankingkhabar.com\/#website\",\"url\":\"https:\/\/english.bankingkhabar.com\/\",\"name\":\"Bankingkhabar\",\"description\":\"Banking News\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/english.bankingkhabar.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/english.bankingkhabar.com\/#\/schema\/person\/8d2633fe06a785fdda1bb1cbdd6f0fde\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/english.bankingkhabar.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/be5b85392e08cabd6d2bfea3c13f6db75126b2fbac0b606a1738e906f65794a7?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/be5b85392e08cabd6d2bfea3c13f6db75126b2fbac0b606a1738e906f65794a7?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"url\":\"https:\/\/english.bankingkhabar.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"BAD LOANS RISE, SEVEN DEVELOPMENT BANKS INCLUDING SANGRILA AT RISK! - Bankingkhabar","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/english.bankingkhabar.com\/?p=1345","og_locale":"en_US","og_type":"article","og_title":"BAD LOANS RISE, SEVEN DEVELOPMENT BANKS INCLUDING SANGRILA AT RISK! - Bankingkhabar","og_description":"Banking Khabar\/ In recent years, Nepal\u2019s financial market has been under continuous pressure. 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