Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: A team from Bangladesh-based accounting firm Hawlader Yunus & Company is arriving in Kathmandu on Saturday, October 12 (Asoj 25) to conduct an independent audit of 10 major commercial banks in Nepal. The firm was selected by the Nepal Rastra Bank (NRB) to carry out an asset quality review (AQR) as part of the country’s financial sector reform commitment under the International Monetary Fund’s Extended Credit Facility (ECF) program.
According to NRB, Hawlader Yunus & Company secured the contract for Rs 43.75 million, after emerging as both technically and financially qualified in a renewed bidding process. The firm will assess the loan quality, credit classification, provisioning policy, risk management systems, and capital adequacy of the selected banks.
The central bank stated that the audit is not a routine financial audit, but a comprehensive asset quality evaluation aimed at determining the true financial health, risk exposure, and long-term stability of Nepal’s banking sector.
The IMF had expressed concerns over weak loan classification practices, rising non-performing assets (NPAs), and insufficient risk management in Nepali banks. As part of the ECF agreement, the government committed to bringing in an independent international auditor to assess commercial banks’ credit portfolios.
NRB had initially invited bids for the AQR last fiscal year, during which India’s KPMG was shortlisted on technical grounds. However, the process was cancelled after it was found inconsistent with Nepal’s Public Procurement Act, prompting a fresh tender. Upon re-evaluation, Hawlader Yunus & Company was selected as the qualified firm.
The upcoming audit will cover Nepal’s 10 largest banks based on loan portfolio size and systemic significance. These include Nabil Bank, Global IME Bank, Nepal Investment Mega Bank, NIC Asia Bank, Prabhu Bank, NMB Bank, Prime Commercial Bank, Agricultural Development Bank, Rastriya Banijya Bank, and Nepal Bank Limited.
The Bangladeshi firm’s team will conduct in-depth field assessments of the banks’ credit departments, restructuring policies, recovery mechanisms, and internal audit controls, and will submit a detailed report to the NRB.
The findings from this audit are expected to guide new regulatory standards for capital adequacy, risk provisioning, and transparency, marking a key milestone in strengthening confidence and credibility in Nepal’s financial system.
If the AQR identifies significant weaknesses in the credit portfolios, banks may face pressure to raise additional capital, improve governance, and tighten loan recovery procedures.
Hawlader Yunus & Company, which has over two decades of experience in financial auditing and asset valuation across South Asian countries, is expected to complete the assessment within the stipulated timeframe set by the central bank.
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