KATHMANDU, SEP 11, 2012
Nepal Rastra Bank (NRB) has barred a current and a former board member of Nepal Bangladesh Bank (NBB) from sitting on the board of any bank or financial institution for the next three years for committing acts detrimental to it.
Bishnu Raj Adhikari and ex-board member Laxmi Bahadur Shrestha, who recently resigned from the bank after the central bank moved against him, have been found guilty of causing loss to the bank while auctioning its non-banking assets (NBA).
The central bank has also fined them Rs 500,000 each and ordered them to pay, within 35 days, compensation equivalent to the loss incurred by the bank. Following NRB’s decision, Adhikari has lost his position in the bank. The NRB Act 2002 allows the central bank to impose a fine up to the amount of the loss and order the bank’s board to remove the director involved in harming it.
According to the central bank, Adhikari and Shrestha caused loss to the bank when auctioning land put up as collateral at Sanepa, Lalitpur where Padma Cinema Hall stands. An NRB official said that they decided to return the guarantee amount deposited by the sole bidder for the land, Rabindra Bahadur Singh, who refused to buy the land after winning the bid. Singh, former chairman of United Development Bank, is presently in jail for banking offences committed while he was its head.
According to NRB, the guarantee amount should have been confiscated as per the existing law. Singh had offered Rs 46.7 million for the land. He had deposited a guarantee amount of Rs 4.67 million, which is 10 percent of the quoted amount, to participate in the bid. However, the bank’s credit sub-committee represented by Adhikari and Shrestha decided to the return the security deposit causing loss to the bank, NRB officials said.
However, NBB chief executive officer Gyanendra Dhungana said that the decision to return the deposit was taken after the winning bidder Singh could not take possession of the land as the default borrower refused to vacate it. “In fact, there has not been any loss to the bank,” he added.
Dhungana said that NBB has already written to its former directors to pay the amount as directed by the central bank. “As the amount is not very large, we hope to recover it soon,” he said.
Last week, NBB issued another auction notice for the land. “There were three-four bidders who didn’t offer more than Rs 33 million,” said Dhungana. “We will not sell it for less than the price offered previously.” Meanwhile, the central bank has also issued written warnings to ex-chairman Pushpa Raj Rajkarnikar, who resigned with Shrestha recently, and public director Indra Bahadur Thapa for their involvement.
Source: The Kathmandu Post
Nepal Rastra Bank (NRB) has barred a current and a former board member of Nepal Bangladesh Bank (NBB) from sitting on the board of any bank or financial institution for the next three years for committing acts detrimental to it.
Bishnu Raj Adhikari and ex-board member Laxmi Bahadur Shrestha, who recently resigned from the bank after the central bank moved against him, have been found guilty of causing loss to the bank while auctioning its non-banking assets (NBA).
The central bank has also fined them Rs 500,000 each and ordered them to pay, within 35 days, compensation equivalent to the loss incurred by the bank. Following NRB’s decision, Adhikari has lost his position in the bank. The NRB Act 2002 allows the central bank to impose a fine up to the amount of the loss and order the bank’s board to remove the director involved in harming it.
According to the central bank, Adhikari and Shrestha caused loss to the bank when auctioning land put up as collateral at Sanepa, Lalitpur where Padma Cinema Hall stands. An NRB official said that they decided to return the guarantee amount deposited by the sole bidder for the land, Rabindra Bahadur Singh, who refused to buy the land after winning the bid. Singh, former chairman of United Development Bank, is presently in jail for banking offences committed while he was its head.
According to NRB, the guarantee amount should have been confiscated as per the existing law. Singh had offered Rs 46.7 million for the land. He had deposited a guarantee amount of Rs 4.67 million, which is 10 percent of the quoted amount, to participate in the bid. However, the bank’s credit sub-committee represented by Adhikari and Shrestha decided to the return the security deposit causing loss to the bank, NRB officials said.
However, NBB chief executive officer Gyanendra Dhungana said that the decision to return the deposit was taken after the winning bidder Singh could not take possession of the land as the default borrower refused to vacate it. “In fact, there has not been any loss to the bank,” he added.
Dhungana said that NBB has already written to its former directors to pay the amount as directed by the central bank. “As the amount is not very large, we hope to recover it soon,” he said.
Last week, NBB issued another auction notice for the land. “There were three-four bidders who didn’t offer more than Rs 33 million,” said Dhungana. “We will not sell it for less than the price offered previously.” Meanwhile, the central bank has also issued written warnings to ex-chairman Pushpa Raj Rajkarnikar, who resigned with Shrestha recently, and public director Indra Bahadur Thapa for their involvement.
Source: The Kathmandu Post
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