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With large businesses to small businesses, as well as individuals, struggling to pay their dues and fulfill financial obligations on time due to the ongoing economic crisis, there has been a dramatic surge in the number of blacklisted individuals and firms.  

The number of individuals and firms blacklisted by the Credit Information Bureau (CIB) at the request of banks and financial institutions surged by 142.38 percent in the last fiscal year 2022/23.

According to the bureau, a total of 30,109 individuals and firms were blacklisted in FY 2022/23. In the previous fiscal year 2021/22, a total of 12,422 firms and individuals were blacklisted.

The CIB blacklists the individuals and firms defaulting on loans and those failing to issue non-funded or underfunded checks at the request of the banks and financial institutions (BFIs) concerned.

Such is the surge in the blacklisting that the number of blacklisted individuals and firms in the last year has surpassed the total number of blacklisted till FY 2021/22. Till FY 2021/22, around 27,000 individuals and firms were blacklisted by the CIB. However, in the last one year (FY 2022/23), 30,109 individuals and firms were blacklisted.

Experts and bankers attribute the rise in blacklisting to the current economic crisis. There has been an interruption in the flow of money in the market due to a prolonged liquidity crunch as well as the slowdown in aggregate demand. In addition, banks and financial institutions’ higher interest rates have also hit small businesses hard. 

Companies and individuals issue checks of a certain date to settle their business and personal transactions. However, due to the recent downturn in business, the ability of companies and individuals to pay their creditors has weakened. People often issue bad checks to their creditors to avoid a difficult situation.

Since last fiscal year, the CIB has also introduced a policy of blacklisting people defaulting on loan payments to microfinance institutions. Of the total blacklisted individuals and firms, 721 are customers of microfinance institutions while the remaining 29,388 have been blacklisted on the recommendation of commercial banks, development banks, and finance companies. The total number of blacklisted individuals and firms has reached 56,384 by the end of FY 2022/23.

Banks and financial institutions recommend individuals and firms that fail to repay loans for six months for blacklisting to the CIB. 

The majority of blacklisting that has happened in the last fiscal year is related to check bounces. CIB Spokesperson Bijay Kunwar said that there were more cases of check bounces in the last fiscal year. 

The statistics of Nepal Police also tell that cheque bounces cases are on the rise. According to the data obtained from Nepal Police, 6,483 cases of banking offenses with the amount equal to Rs 8.57bn have been registered till mid-March 2023.

The data show there have already been more banking fraud cases registered in the first eight months of FY 2022/23 than in FY 2021/22. According to Nepal Police, a total of 5,416 cases of banking fraud were registered in the last fiscal year. 

The majority of banking offense cases are related to cheque bounces. In this fiscal also, 99 percent of banking offense cases are of bad cheques. 

Of the total 6,483 banking fraud cases, 6,422 were related to bad checks. As per the Banking Offense and Punishment Act, 2008, the non-payment of a written cheque three times due to the account holder’s failure to maintain the amount mentioned on the check is counted as a banking offense.

Number of blacklisted individuals and firms 

FY Number

2020/21 4,474

2021/22 12,422

2022/23 30,109

The price of gold has dropped by Rs 500 per tola in the domestic market on Sunday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 112, 300 per tola today. It was traded at Rs 112, 800 per tola on Friday.

Meanwhile, tejabi gold is being traded at Rs 111, 750 per tola. It was traded at Rs 112, 250 per tola.

Similarly, the silver is being traded at Rs 1,465 per tola today.

The price of gold has dropped by Rs 800 per tola in the domestic market on Friday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 112, 800 per tola today. It was traded at Rs 113, 600 per tola on Thursday.

Meanwhile, tejabi gold is being traded at Rs 112, 250 per tola. It was traded at Rs 113, 050.

Similarly, the silver is being traded at Rs 1,480 per tola today.

Sudurpaschim Province Government has failed to utilize Rs 11bn of the budget allocated for the fiscal year 2022/23.

Out of the total allocation of Rs 35bn in 2022/23, the provincial government could spend only Rs 24bn by mid-July 2023. The provincial government has stated that Rs 7bn from the capital budget and Rs 4bn from the recurrent budget remained unutilized in the previous fiscal year, which concluded in mid-July.

According to Basudev Joshi, chief of Sudurpashchim Treasury Controller Office, only Rs 15bn out of the allocated Rs 22.84bn for the capital budget was expended. Similarly, Rs 8bn out of the allocated Rs 12.3bn for recurrent expenditure was utilized during the review year.

“Despite having numerous development plans, the province government lacked sufficient personnel to execute them,” Joshi explained. “This hindered the spending process.”

Joshi further mentioned that the majority of the unspent budget consisted of equalization grants and conditional grants received from the federal government.

The provincial government has been allocating budgets for projects even smaller than those prepared by local units. Under the Ministry of Physical Planning alone, there were 6,200 projects with budgets ranging from Rs 300,000 to Rs 50m.

“The budgets are allocated with the intention of favoring party cadres and individuals close to influential figures. There is a practice of implementing projects through consumer committees led by party cadres to pocket commissions,” said Rajendra Singh Rawal, the parliamentary party leader of CPN-UML in the provincial assembly. “Under such circumstances, how can the budget be fully spent this year?”

In terms of capital expenditure, the Ministry of Industry, Tourism, Forest, and Environment achieved the highest spending progress at 79 percent, while the Office of the Chief Minister and Council of Ministers attained the lowest progress at 49 percent.

Similarly, the spending progress of the Ministry of Physical Infrastructure stood at 73 percent, the Ministry of Social Development at 71 percent, the Ministry of Economic Affairs and Planning at 65 percent, the Ministry of Land Management, Agriculture and Cooperatives at 65 percent, and the Ministry of Internal Affairs and Law at 56 percent.

This is the second term of the Sudurpaschim Province Government. The average budget spending has remained at 60-65 percent over the past five years. In previous years, the budget spending stood at 59 percent in 2018/19, 62 percent in 2019/20, 64 percent in 2020/21, and 66 percent in 2021/22.

“In the previous fiscal year, budgets were allocated for fragmented projects, and we also faced a shortage of technical staff,” Naresh Bahadur Shahi, Minister of Economic Affairs of Sudurpaschim Province, stated. “Now, we have discontinued fragmented programs. These programs will be implemented by local units. We expect an improvement in spending in the current fiscal year.”

Approximately one-fourth of the budget for 2022/23, amounting to Rs 9bn, was spent in the last month of the fiscal year alone i.e. from mid-June to mid-July.