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DRT receives fewer claim applications
RBB topped the list with its claim application against Universal Leather Industry, Hetauda, for repayment of Rs. 646.7 million
KATHMANDU, AUG 09 -
The number of claim applications received by the Debt Recovery Tribunal (DRT) from banks and financial institutions against their defaulting borrowers has been declining since the fiscal year 2008–09. There were 25 claim applications in the last fiscal year.
The DRT received 432 claim applications in fiscal 2007–08, 52 in 2006–07, 1,737 in 2005–06, 154 in 2004–05 and 94 in 2003–04.
DRT registrar Kedar Nath Poudel said that a strict credit policy adopted by banks in recent years and the expiry of the deadline for filing claims against defaults made before fiscal 2003–04 were mainly responsible behind the decrease.
The Bank and Financial Institution Debt Recovery Act 2001 came into effect after the DRT was formed in 2003. The first two years saw a large number of claim applications being filed as the DRT Act had given a time limit of three years from the date the act came into effect, said DRT officials.
The time limit was extended to five years following an amendment to the act in 2007. Where the default occurred after the act came into effect, claim applications could be made within four years.
In 2009–10, the Bank of Kathmandu (BoK) filed 11 claim applications and Nepal Credit and Commerce Bank five, said the DRT.
In terms of the amount involved, Rastriya Banijya Bank (RBB) topped the list with its claim application against Universal Leather Industry, Hetauda for repayment of Rs. 646.7 million.
RBB chief executive officer Janardan Acharya said they filed the claim application as it had failed to comply with the promises made during the restructuring of its loans. The bank had provided working capital too as part of the restructuring, said RBB. Claim applications were made for Rs. 859.40 million in the last fiscal year compared to Rs. 389.2 million in the previous year.
Lumbini Bank filed a claim application against Suma Enterprises for Rs. 93.4 million which is the second largest amount. The smallest amount was Rs. 723,000 in a claim application filed by Nepal Bangladesh Bank.
Nepal Bangladesh Bank had filed three claim applications, Lumbini Bank two, and RBB, SBI Bank, Machhapuchchhre Bank and Patan Finance one each in the last fiscal year.
Posted on: 2010-08-10 09:11
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