Kathmandu – A team from Bangladesh-based Howladar Yunus & Co., selected to audit Nepal’s 10 commercial banks, is arriving in Kathmandu on Saturday.

The Nepal Rastra Bank (NRB) has hired the firm to carry out an asset quality review of major commercial banks at a cost of Rs 43.75 million.

This audit is part of the Extended Credit Facility agreement between the Government of Nepal and the International Monetary Fund (IMF), which requires an independent international auditor to assess the quality of loans issued by commercial banks.

The IMF had raised concerns about weaknesses in loan quality, non-performing loans, and risk management in Nepal’s banking sector.

Last year, NRB had invited bids for the audit. Although India’s KPMG was found technically qualified, its proposal was rejected for violating the Public Procurement Act.

After reopening the tender, Howladar Yunus & Co. was selected based on both technical and financial criteria.

The firm will review the loan portfolios of 10 major banks, studying their credit departments, risk management systems, loan classification, provisioning, restructuring, recovery, and internal audit controls. A detailed report will be submitted to NRB.

According to NRB, the audit will go beyond regular financial checks to assess the actual capital strength, risk level, and long-term stability of the banks.

The 10 banks will be chosen based on their loan exposure and systemic importance.

Likely candidates 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, Nepal Bank Limited, Himalayan Bank, and Siddhartha Bank, out of which 10 will be reviewed.

The results will help determine whether banks have enough capital and sound provisioning policies. Based on the findings, NRB may introduce new regulations to strengthen the financial system.

The move is seen as a major step to improve transparency and trust in Nepal’s banking sector. If the audit reveals weak loan quality, banks may be required to increase capital and tighten risk management.

Howladar Yunus & Co. has more than 20 years of experience in financial audits and asset quality reviews across South Asia.