Kathmandu. In the first quarter of the current fiscal year, seven national level development banks have earned a profit of Rs 78.34 crore.

The profit of the national level development bank has decreased by 14.97 percent in the period of one year. In the last fiscal year, these eight development banks had earned a profit of Rs 1.42 billion.

Out of the 8 development banks in operation during this period, Lumbini Bikas Bank is in loss. The development bank reported a loss of Rs 34.85 crore in the first quarter of the current fiscal year. The bank had posted a net profit of Rs 20.19 crore in the previous fiscal year.

In the first quarter of the current fiscal year, the profit of commercial banks as well as development banks has also declined. According to the financial statements made public by the banks, the profit of 3 out of 8 development banks has decreased in the first quarter of the current fiscal year. The profit of the remaining 4 banks has increased marginally.

The main reasons for the decline in the profitability of the bank are the decline in loan investment, problems in loan recovery and the slowdown of the economy. As a result, private sector investment has been declining in the last few years. Due to the problem in loan recovery, the bad loans of the bank are increasing. The banks’ profit has also been affected by increasing the provision for bad loan management.

Even though interest rates in banks and financial institutions have been falling in the last few years, big industries and businessmen are not looking to take new loans. Similarly, banks have not been able to make risky investments due to the high cash reserve ratio (CRR) and capital adequacy ratio. Under the pressure of which the bank has made a profit.

In the first quarter of the current fiscal year, the net profit of Garima Bikas Bank, Kamana Sewa Bikas Bank, Mahalaxmi Bikas Bank and Shangrila Development Bank has increased. Profit of Muktinath Bikas Bank, Sine Resunga Development Bank and Jyoti Bikas Bank has decreased.