KATHMANDU, JAN 09-2012
Banks that have extended inter-bank loans to troubled Nepal Share Market and Finance Limited (NSMFL) have started the process of purchasing the latter’s loans.
Last week, the Nepal Rastra Bank (NRB) put in place a provision that enabled banks and financial institutions (BFIs) to recover inter-bank loans from their peers by purchasing their loans.
Janata Bank and Century Commercial Bank have sought the central bank’s approval to their proposal for purchasing NSMF’s loans worth Rs 360 million and Rs 100 million, respectively.
As per the central bank directive, BFIs are required to purchase defaulters’ loans at least double of the inter-bank loan and return back the remaining amount immediately.
“We have requested the central bank to allow us to purchase NSMFL’s loans worth Rs 100 million and ware now waiting for its decision,” said Ganesh Kumar Shrestha, chief executive officer of Century Commercial Bank.
Other five lenders—Prime Commercial Bank, Mega Bank, Sunrise Bank, KIST Bank and Machhapuchhre Bank—are assessing the book of the troubled finance company.
Prime, has to recover Rs 80 million from NSMFL. “We have almost completed the assessment process and will send a letter to NRB by Monday, seeking its approval loan purchase,” said Sanjeev Manandhar, Prime general manager.
Mega CEO Anil Shah said they will be seeking NRB’s approval to purchase NSMFL’s loans worth Rs 101 million in order to recover Rs 50 million.
NSMFL is also facilitating the banks to assess its loan portfolio. “We are helping them to assess our loans,” said NSMFL CEO Nandan Hari Sharma.
Banks are in a rush to complete the loan purchase process by mid-January, as they are required to make 25 percent loan provisioning if they fail to recover inter-bank loans by the date, as per the NRB provision.
NRB has also pledged its support to the banks. “We will make the approval process swifter,” said NRB Spokesperson Bhasker Mani Gnawali.
Source: Kantipur
Banks that have extended inter-bank loans to troubled Nepal Share Market and Finance Limited (NSMFL) have started the process of purchasing the latter’s loans.
Last week, the Nepal Rastra Bank (NRB) put in place a provision that enabled banks and financial institutions (BFIs) to recover inter-bank loans from their peers by purchasing their loans.
Janata Bank and Century Commercial Bank have sought the central bank’s approval to their proposal for purchasing NSMF’s loans worth Rs 360 million and Rs 100 million, respectively.
As per the central bank directive, BFIs are required to purchase defaulters’ loans at least double of the inter-bank loan and return back the remaining amount immediately.
“We have requested the central bank to allow us to purchase NSMFL’s loans worth Rs 100 million and ware now waiting for its decision,” said Ganesh Kumar Shrestha, chief executive officer of Century Commercial Bank.
Other five lenders—Prime Commercial Bank, Mega Bank, Sunrise Bank, KIST Bank and Machhapuchhre Bank—are assessing the book of the troubled finance company.
Prime, has to recover Rs 80 million from NSMFL. “We have almost completed the assessment process and will send a letter to NRB by Monday, seeking its approval loan purchase,” said Sanjeev Manandhar, Prime general manager.
Mega CEO Anil Shah said they will be seeking NRB’s approval to purchase NSMFL’s loans worth Rs 101 million in order to recover Rs 50 million.
NSMFL is also facilitating the banks to assess its loan portfolio. “We are helping them to assess our loans,” said NSMFL CEO Nandan Hari Sharma.
Banks are in a rush to complete the loan purchase process by mid-January, as they are required to make 25 percent loan provisioning if they fail to recover inter-bank loans by the date, as per the NRB provision.
NRB has also pledged its support to the banks. “We will make the approval process swifter,” said NRB Spokesperson Bhasker Mani Gnawali.
Source: Kantipur
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