NRB takes action against six banks

By A Staff Reporter,Kathmandu, Oct. 22: Nepal Rastra Bank has taken action against six commercial banks. The central bank has taken action against Himalayan Bank, Nabil, NMB, NIC Asia, Laxmi Sunrise and Citizens Bank in violation of integrated directives and others.

The NRB has imposed cash fines to two banks and alerted the CEOs and board of directors of these banks.

The NRB has taken action against the chairman, directors and chief executive officers of commercial banks in the first quarter of the current fiscal year.

Laxmi Sunrise Bank has been fined Rs. 7 million for violating the law and directives related to money laundering.

Similarly, Himalayan Bank has fined Rs. 16.7 million for not maintaining loan-deposit ratio in the month of Baishak

The NMB Bank has disbursed loans provided as commercial agriculture and livestock loans for other purposes rather than for commercial purposes. It has been instructed to return the entire amount of interest subsidy provided in the loan from the borrower and deposit it in the NRB. In addition, CEO of the bank has been alerted citing violation of the procedures and instructions issued by the bank.

It is seen that Nabil Bank increased the interest rate in violation of the integrated guidelines, along with regular interest and penal recovery, increased the premium for not calculating risk-weighted assets according to the bank’s capital adequacy framework 2015, took quarterly loan administration fees from the borrowers and provided lower interest than the published interest rate to the customers on institutional fixed deposits.

The NRB has alerted the board of directors and CEO of the bank.

Similarly, CEO of Citizens Bank has been alerted for not classifying loans, not maintaining provisions for loan losses, not calculating risk-weighted assets according to the Capital Adequacy Framework 2015, and repeatedly increasing the premium rate contrary to instructions. The NIC Asia Bank has been instructed to return the excess interest (risk premium) taken from the customers to the respective customer’s account, but after not returning it, it has again increased the interest against the instructions.

Contrary to the capital adequacy framework, the bank has provided a low-risk weight of the loan and has done wrong reporting, said the NRB.

The CEO and the board of directors have been alerted after violating the integrated instructions issued by the central bank.