In what is a serious cause of concern, Non-Performing Loans (NPL) makes the highest irregularities under the shortfalls, lapses, and deficiencies category. This is as per the Annual Audit Report 2020. During the Public Accounts Committee’s (PAC) presentation on the Financial and Performance Audit Reports in the parliament today, some members said the concerned agencies should come up with concrete solutions to this. NPL is a loan in which the borrower is not able to pay back the principal or interest for some time.
Of more than Nu 1,500 M of irregularities under the shortfalls, lapses, and deficiencies category in 2020, NPL encompasses more than Nu 650 M. Members of the Parliament expressed their concerns.
According to the National Council Member from Trashigang, Lhatu, it is important to know the reasons and then find solutions. The reasons he said could be due to high-interest rates, failed business, or clients not being serious about the repayment.
“If it is because of the high-interest rate, then, the interest rate should be reduced,” he said.
Similarly, Opposition Leader, Dorji Wangdi, said irregularities related to NPL are not new and that it has also occurred in the past. “But the Public Accounts Committee didn’t have any recommendation to this,” he added.
However, the committee’s chairperson, Ugyen Tshering, said financial institutions are forthcoming to refinancing the defaulters if they come up with a good business proposal.
“During the PAC members’ discussion with the head of the financial institutions, there are possibilities of re-financing after getting approval from RMA,” he added.
The chairperson further added that NPL should not be left as it is and that the government should come up with solutions.
Meanwhile, according to the findings of the committee, one of the causes of the NPL is not using the loan amount for the intended project.
The joint sitting of the parliament will continue deliberation on the reports tomorrow.
Pema Selden Tshering/ Tshering Zam
Edited by Chayku
