Kathmandu, July 7 -- A rise in nonperforming loans (NPLs) could pose serious risks to the economy, economists warned on Sunday.

The number of nonperforming loans typically rises during times of economic uncertainty. These are loans for which borrowers either do not or cannot make payments.

At a pre-monetary policy discussion titled "Tackling Non-performing Loans (NPLs): Role of Monetary Policy in Ensuring Financial Stability", organised by the Society of Economic Journalists-Nepal in Kathmandu, economist Sameer Khatiwada said that extending loans simply to avoid bankruptcy is not a rational strategy.

"We need to conduct a proper survey," Khatiwada said. "The government's decision to bring the asset management company into operation is ...