The in-depth on-site inspection of the 10 largest banks in Nepal by a third-party international audit will start in July this year. According to Nepal Rastra Bank, it has prepared the terms of reference for the loan portfolio review. “As the ToR is being finalized, the loan portfolio review is likely to be delayed by two to two-and-a-half months. There was a plan to start in-depth on-site inspections assisted by independent international third-party auditors by the end of April this year.

Once the ToR is finalized, there is a plan to hire an international consultant through a bidding process. Once the consultant is hired, it is expected to start an off-site review of the loan portfolio by June or July.

There was a plan to start in-depth on-site inspections assisted by independent international third-party auditors by the end of April this year. In-depth on-site inspections of 10 such banks, assisted by a third-party international audit firm, to review their loan portfolios in line with the new regulatory framework with special attention to loan and collateral valuation, evergreening, group borrowing, and concentration risks is one of the key IMF conditions that Nepal agreed to get funding under its Extended Credit Facility (ECF).