November 6: The number of customers on the blacklist of Banks and Financial Institutions (BFIs), which had increased during the lockdown period, has now declined. The number of customers on the blacklist had skyrocketed when the government imposed a nationwide lockdown and prohibitory order from March 24 to mid-July.

In the month of June/July, 9,626 borrowers were blacklisted by BFIs. But that number has dropped to 359 now. According to the Credit Information Center, inclusion of the names of customers that bounced their cheques during the lockdown in the blacklist was the reason for the increase in blacklisted customers.

According to the Center, 10,732 people were added to the blacklist from April to the end of August. However, the number has plummeted now. 

"From that period until last Thursday (November 5), the number has dropped as most of the check bouncers have been removed from the blacklist after correcting their mistake and making the payments to the check bearer," the center said.

Nepal Rastra Bank (NRB) had issued a unified directive on mid-August 2019, making an arrangement to blacklist the person, firm, company or organization issuing the check if they signed the check incorrectly and did not pay the amount within one year due to insufficient amount. Earlier, check issuers were blacklisted only if they were found to have bounced checks repeatedly.

With the removal of the names added during the lockdown from the blacklist, only 212 names in March, 84 names in April, 359 names in May, 359 names in June, 443 names in July and 313 names in August remain in the blacklist.

Bhuvan Kumar Dahal, the chairman of the Nepal Bankers' Association, says that the blacklist has not increased as the entrepreneurs or businesses that weren’t able to repay their loans during the lockdown were not converted into non-performing loans.

"We have not blacklisted bad debtors because of COVID-19. The new non-performing loans have not been blacklisted and the old ones have been making their repayments," he said, adding, “More names have been sent for the blacklist for bouncing cheques.”

Banks and financial institutions issue circulars to the credit information center to blacklist customers listing the names of customers with loans that are inactive or overdue, and customers giving bounced cheques. The center then blacklists such debtors. Banks and financial institutions are not allowed to provide loans to blacklisted borrowers. In addition, the blacklisted person is denied various facilities from the state.