The bank management says 40,000 of its total 60,000 clients have been launching protest against the management to fulfill their demand. This has exposed its loans worth Rs 1 billion into risk.
As a part of the strike, the borrowers -- mainly women - have padlocked the bank´s head office from Sunday. They have urged waiver of all loans amounting up to Rs 30,000 and their interests.
They raised the demand for write off referring to similar programs the government implemented for small borrowers of Agricultural Development Bank (ADB) and Small Farmers Co-operatives (SFC).
Two-third of the bank´s borrowers argue that the government was depriving them of facilities and rights it provided to the small borrowers of ADB and SFC last year.
Terming the present strike as the first phase of protest, the ERDB borrowers in Tankisinuwari and Biratnagar padlocked the office. “They have even issued a warning of not paying their regular installments, until and unless the government treated them equally as the borrowers of ADB and SFC,” said Shyam Dev Yogi, executive director of the (ERDB).
The government led by UCPN (Maoist) in the last fiscal year announced a program of writing off principal and interest liabilities of borrowers who have taken loans amounting up to Rs 30,000 from ADB and SFC. Under the scheme, the government had written off loans of about Rs 6.5 billion of the small borrowers of ADB and SFC.
ERDB officials said their borrowers too had been demanding them to pledge similar facility as soon as the government relieved small borrowers of ADB and SFC loans. The officials further said that the liability of the small borrowers have more than doubled over the years, especially as they have not serviced even interests referring to Maoist insurgency and shrinking economic activities in rural areas.
“The bank could face closure if the present problem is not addressed immediately,” said Yogi, adding that the bank has no authority to decide on loans waiver. “The initiatives to resolve this problem should come from the government,” he stated.
ERDB, which was established in 1992, is operating with 30 branches in 6 districts of the eastern region. The bank is operating with profit from the last seven years.
“We are simply not in a position to write off the loans. It will render us bankrupt,” said Yogi.
Operating as a semi-government entity, ERDB has been extending loans to the underprivileged community without any collateral. “The problem surfaced largely because the government ignored the issue for too long,” the bank officials said.
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