Kathmandu, Nov. 10 -- The non-performing loans (NPL) of a number of commercial banks in Nepal have crossed seven percent, after the banks failed to recover loans from their clients.Due to the rise in NPLs, the banks have allocated an additional amount of Rs 11 billion for provisioning in the first three months of the current fiscal year (FY) as per the regulatory norm mandated by Nepal Rastra Bank (NRB). As per the unaudited financial reports unveiled by 20 commercial banks, their average NPL has reached 4.86 percent, up from 4.04 percent a year ago.

As per the NRB rules, banks and financial institutions (BFIs) have to maintain provisioning ranging from 1-100 percent of amounts in outstanding loans. The more a borrower delays in repaying...