Nepal, Aug. 16 -- The average non-performing loan (NPL) of 20 commercial banks surged to 5.44 percent, while that of individual banks soars as high as 15.55 percent amid a notable rise in their bad loans.

According to the unaudited financial statements of the commercial banks for the fiscal year 2025/26, the average NPL soared by over 0.84 percent in one year. In 2024/26, the figure stood at 4.6 percent.

The increased NPL in the banking sector indicates that the pressure of bad loans has increased further in Nepal's banking sector. Amid poor credit expansion, the increase in bad debts further questions about the banks' capacity on maintaining the credit quality and loans recovery.

Meanwhile, a recent study by ICRA Nepal, a credit rati...