Kathmandu. Nepal Rastra Bank has taken action against three development banks and two finance companies for violating regulatory provisions. The Rastra Bank has taken action against Muktinath Bikas Bank, Narayani Development Bank, Salpa Bikas Bank, Pokhara Finance and Janaki Finance Company.
The Rastra Bank has taken action against the chairmen, directors and chief executive officers of those banks and finance companies in the third quarter of the current fiscal year.
Which one is the culprit?
Muktinath Bikas Bank
During the on-site inspection conducted by the National Bank, it was found that Bharatraj Dhakal, the Chairman of the Board of Directors of the institution, was participating in the capacity of the coordinator of the building construction committee formed for the purpose of building construction of the institution, violating the provision in the integrated directive issued by this bank that ‘the Chairman of the Board of Directors shall not be allowed to be included in any internal committee or sub-committee other than the Board of Directors’. Bharatraj Dhakal has been warned in accordance with clause (a) of sub-section (2) of Section 100 of the Nepal Rastra Bank Act, 2058 BS.
Narayani Development Bank
In the letter issued by the bank on 21st Shrawan 2077 when the institution was removed from the list of troubled institutions, the conditions were to achieve the paid-up capital as prescribed within 2 years, to maintain a limit on the collection of deposits from the general public not exceeding 100 percent of the paid-up capital, and to maintain a single customer loan limit within a maximum limit of 10 percent of the primary capital. However, since it has not been observed that the minimum paid-up capital has not been maintained as per the provisions, has collected deposits from the general public in excess of the prescribed limit, has disbursed loans in excess of the single customer loan limit, and has collected financial resources in excess of the limit prescribed in the integrated directives, and has not been able to maintain the capital fund ratio prescribed by this bank for a long time, the board of directors of the institution has been directed to increase the minimum paid-up capital and capital fund ratio prescribed by this bank in accordance with Clause (c) of Sub-section (1) of Section 100 of the Nepal Rastra Bank Act, 2058 BS. A written order has been issued to the board of directors of the institution to immediately stop violating the regulatory directives and to maintain it by mid-Ashad as the instructions given by the Nepal Rastra Bank have been repeatedly violated.
Salpa Bikas Bank
Since the Nepal Rastra Bank has not yet maintained the minimum paid-up capital prescribed for ‘B’ category financial institutions and has not implemented the previous instructions given repeatedly in order to achieve the prescribed minimum paid-up capital, the board of directors of the institution has been given a warning pursuant to Sub-section (2) Clause (a) of Section 100 of the Nepal Rastra Bank Act, 2058 BS.
Pokhara Finance
As the institution did not maintain the mandatory balance amount to be maintained as per the regulatory provisions during the period from 2081 Magh 13 to 26 (P15), a fine of 46 thousand 718.23 has been imposed as per the existing provisions.
Similarly, in the context of the complaints pointed out in the report of the comprehensive on-site inspection conducted by the National Bank, the Chief Executive Officer of the institution, who is in charge of the overall management of the institution, was found to have not fulfilled his responsibilities, he was asked to explain. As the explanation submitted was not satisfactory, Ravichandran Gurung has been fined Rs 500,000 as per Clause (9c) of Sub-section (2) of Section 100 of the Nepal Rastra Bank Act, 2058 BS.
Similarly, as the institution’s non-performing loans stood at 33.44 percent as of mid-December 2081 BS and the minimum capital fund ratio was not as per the regulatory standards, prompt corrective actions have been taken against the institution as per Clause (c) of Regulation 3 of the Regulations on Prompt Corrective Action of Banks and Financial Institutions, 2074 BS, with the condition that the institution’s financial indicators should be maintained as per the instructions of the Rastra Bank within 6 months.
Janaki Finance
As of mid-November 2081, the institution did not meet the minimum capital ratio as per the regulatory standards, and therefore, the National Bank has taken prompt corrective action as per Clause (c) of Regulation 3 of the Regulations on Prompt Corrective Action of Banks and Financial Institutions, 2074.
प्रतिक्रिया दिनुहोस्