Nepal, Feb. 10 -- Nepali banks and financial institutions (BFIs) may face stricter provisioning requirements after a recent loan portfolio review found weaknesses in credit risk management and reporting among Class A banks.

Officials at Nepal Rastra Bank (NRB) said a review of 10 large commercial banks, conducted by Bangladeshi consulting firm Howladar Yunus & Co, revealed that banks had failed to maintain adequate provisioning against loans at risk of default. The review also found lapses in loan classification linked to recovery prospects.

"The report indicates that banks have not properly adopted rules related to loan classification and provisioning, increasing credit risk," an NRB official said on condition of anonymity.

The centra...