Non-performing loan management of commercial banks in Nepal

Abstract

The main objective of the study is to analyze non performing loan of commercial banks. The design of study is competitive in nature. The researcher used regression analysis method to select the data. The main variables of the research are loan and advance, total assets, loan loss provision, non performing loan and net profit. The data presented in the study are secondary type. The study conducted a research on Nepal Bank and Everest Bank Ltd, which are the growing banks in Nepal. Non-performing loan to total loan ratio of selected banks is in fluctuating trend but Nepal Bank's ratio is higher than Everest Bank. This research is focused on studying the non-performing loans of Nepal Bank Ltd. and Everest Bank Ltd. EBL is more successful than NBL to mobilize its total deposit as loan & advances and acquiring high profit. NBL has huge amount to be made for provision of loan losses. Therefore, NBL has not been able to earn a profit from the point of view average. But both bank can be managed and bring them below 5% by managing loan properly in final year. EBL has the lowest non-performing loan to loan loss provision, thus EBL performing well or maintaining their NPL perfectly than NBL.EBL has the higher ratio signifies that the bank safeguard against future contingencies but it reduces profit. EBL has the lowest ratio thus EBL performing good or maintaining their NPLs perfectly than NBL. EBL has high volume of interest income is an indicator of good performance of lending activities than NBL. . This study is also bounded by many limitations, such as secondary data, unreliability of time and resources. In this study the main focus is given to analyze the nonperforming loan of commercial bank through NRB directives. Therefore the study may not be generated in all case and accuracy depends upon data collection and provided by the concerned organizations.