KATHMANDU, AUG 27, 2012
NB Group promoted commercial bank –– Nepal Bangladesh Bank (NB Bank) –– might be the next in line to get chastised by the regulator.
The group’s non-life insurance company –– NB Insurance Company — is already facing suspension from any activities after the regulator –– Insurance Board — found the company to be engaged in a series of misappropriation of funds by the company’s executive board.
Another NB Group promoted company –– National Hydropower Company –– has been unable to hold its annual general meeting due to the group’s uncooperative behaviour.
The banking regulator –– Nepal Rastra Bank (NRB) –– has asked NB Bank to provide a written clarification for the bank’s haphazard write back of the bad loans and its failure in fulfilling the specifications mentioned in last year’s balance sheet, among other issues related to corporate governance.
The bank is said to have written back loans worth Rs 400 million provided to the directors of the bank and some more similar loans were written back by Nepal Sri Lanka Merchant Finance before the finance company merged with NB Bank in February 2011.
The bank’s chairman Pushpa Raj Rajkarnikar has resigned following NRB’s directive and was replaced by Shambhu Sharan Kayastha who retired from NRB’s board less than a month back.
“NRB has only asked the bank to justify some of their doings, and it does not mean that the central bank is going to penalise the bank,” said spokesperson for NRB Bhaskar Mani Gyanwali. “Action will be taken against the bank only if the explanation provided is not sufficient or it fails to follow subsequent direction,” he added.
Each board member will be levied a fine of Rs 500,000 in case they fail to justify their decisions. The bank with Rs 2.9 billion paid up capital has mobilised deposits worth Rs 16.9 billion and floated loans worth Rs 10.9 billion.
This is not the first time the central bank has found trouble in the bank, as in 2006, its management was taken over by NRB when the bank’s mismanagement endangered billions of savings of depositors.
NB Group under the helm of Jit Bahadur Shrestha and Lakshmi Bahadur Shrestha partially own the companies such as Nepal Bangladesh Bank, Nepal Credit and Commerce Bank, NB Insurance, National Hydropower Company, Harisidhdhi Bricks and Tiles Factory, and International Recreation Center. Except for International Recreation Center, the rest of the companies are in trouble.
Source: THT
NB Group promoted commercial bank –– Nepal Bangladesh Bank (NB Bank) –– might be the next in line to get chastised by the regulator.
The group’s non-life insurance company –– NB Insurance Company — is already facing suspension from any activities after the regulator –– Insurance Board — found the company to be engaged in a series of misappropriation of funds by the company’s executive board.
Another NB Group promoted company –– National Hydropower Company –– has been unable to hold its annual general meeting due to the group’s uncooperative behaviour.
The banking regulator –– Nepal Rastra Bank (NRB) –– has asked NB Bank to provide a written clarification for the bank’s haphazard write back of the bad loans and its failure in fulfilling the specifications mentioned in last year’s balance sheet, among other issues related to corporate governance.
The bank is said to have written back loans worth Rs 400 million provided to the directors of the bank and some more similar loans were written back by Nepal Sri Lanka Merchant Finance before the finance company merged with NB Bank in February 2011.
The bank’s chairman Pushpa Raj Rajkarnikar has resigned following NRB’s directive and was replaced by Shambhu Sharan Kayastha who retired from NRB’s board less than a month back.
“NRB has only asked the bank to justify some of their doings, and it does not mean that the central bank is going to penalise the bank,” said spokesperson for NRB Bhaskar Mani Gyanwali. “Action will be taken against the bank only if the explanation provided is not sufficient or it fails to follow subsequent direction,” he added.
Each board member will be levied a fine of Rs 500,000 in case they fail to justify their decisions. The bank with Rs 2.9 billion paid up capital has mobilised deposits worth Rs 16.9 billion and floated loans worth Rs 10.9 billion.
This is not the first time the central bank has found trouble in the bank, as in 2006, its management was taken over by NRB when the bank’s mismanagement endangered billions of savings of depositors.
NB Group under the helm of Jit Bahadur Shrestha and Lakshmi Bahadur Shrestha partially own the companies such as Nepal Bangladesh Bank, Nepal Credit and Commerce Bank, NB Insurance, National Hydropower Company, Harisidhdhi Bricks and Tiles Factory, and International Recreation Center. Except for International Recreation Center, the rest of the companies are in trouble.
Source: THT
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