3rd Quarter Report of Gurkha Development Bank

Kathmandu, May 6

Gurkha Development Bank Ltd. has posted net profit of Rs. 74.722 million during the 3rd quarter of fiscal year 2070/71

The struggle continues for Gurkha Dev Bank

KATHMANDU, SEP 19 - 2012

It has been one and half years since Gurkha Development Bank (NRB) was declared crisis-ridden, but the bank is still struggling to recover bad loans.

The central bank recently dispatched a strongly-worded letter to Gurkha, asking why it failed to recover 20 big loans and what it could do to recover the amount, according to a senior Gurkha official.

Those 20 loans (Rs 1.13 billion), most of them related to the real estate sector, account for two-thirds of the bank’s total bad loans (Rs 1.5 billion).

According to the bank’s internal assessment, it requires at least Rs 1 billion to turn healthy. “The central bank, a few days ago, asked for a viable plan to recover the chronic bad debts,” said the Gurkha official.

Among the loans the central bank has pointed out are those lent to Swayambhuraj Bajracharya, Raenna Asset Developer, Santoshi Rai International, Sony and Salima Developers, Darsandhunga Roda Uydog, Mondhum Housing and Investment and SN Developers.

Other bad loans of the bank include those going to Indeep Developers Private Limited, Sukla Trade, Lumbini Infrastructure, BKHP Construction Company, Muna Housing, Morang Model Residence, Janamukti Housing and Abdhul Kawadi. “I have created environment for the recovery of around Rs 350 million,” said Gurkha’s director Amod Domzan, who was removed from the post of managing director by the bank’s board on Monday. “Loanees including Muna Housing, Morang Model Residence, Janamukti Housing are in our contact and have committed to repay loans.”

Even Pancha Lal Maharjan, whose land was put up collateral to sanction loans to Abdul Kawadi, is also trying to claim back his land by repaying the loan amount, according to Domzan.

“If those 20 big loans—most of them connected with promoters—are recovered, the bank will be in a healthy condition,” said a senior NRB official. “But nobody heading the management made efforts to recover the loans.”

While declaring Gurkha crisis-ridden on March 25, 2011, the central bank had given it a six-month time to work for revival. The central bank had asked Gurkha to reduce its nonperforming loans to 5 percent.


MD Domzan ousted

A meeting of the Gurkha Development Bank board on Monday removed Managing Director Amod Domzan and decided appoint Raj Kumar Rai to the post.  The troubled bank has sent Rai’s name to the Nepal Rastra Bank for approval, over which Domzan has written a note of descent. “Until the central bank decides, Chairman Prem Begha will work as executive chairman,” said a Gurkha source. However, as a central bank directive has barred a BFI chairman from holding executive post, there are doubts about whether NRB would allow Begha to function as executive chairman. According to a Gurkha source, Domzon has questioned Rai’s eligibility to hold the post of chief executive as he has ‘never worked in a BFI’. Rai is a chartered accountant.

Source: The Kathmandu Post

NRB freezes assets of Gurkha Bank loan defaulters

KATHMANDU, MAY 04, 2012

The Nepal Rastra Bank (NRB) has decided to freeze fixed assets of Muna Housing & Developers and Lumbini Infrastructure Private Limited for defaulting big loans taken from now crisis-ridden Gurkha Development Bank.

NRB’s recent board meeting also decided to freeze assets of these companies’ promoters—Gyanendra Bahadur Thapa Magar of Muna Housing and Pashupati Nath Shukla and Nisha Sukla of Lumbini Infrastructure.

Muna Housing has to the pay around Rs 50 million, while Lumbini Infrastructure owes Rs 40 million to the bank, including interests, according to the central bank. An NRB official said they have also decided to take action against Gurkha officials involved sanctioning the loans.

Gurkha is struggling to recover bad loans—the major reason behind the crisis at the bank—as many of its defaulters are at large, according to Gurkha Chief Executive KK Bhattarai. He said the banks needs about Rs 1 billion to turn itself healthy.

The central bank has already frozen banks accounts and assets of bank Gurkha officials, including its former executive chairman Dambar Bahadur Bamjan and directors Nirmal Gurung, Dhan Prasad Rai, Dinesh Shakya, Mina Shrestha, Sanjeev Kumar Mishra, Mahesh Prasad Rijal and Ramesh Tamang.

Other officials include immediate general manager Rajendra Das Shrestha—who is also a promoter of the bank—immediate credit department chief Deepak Rana and former director Prabeen Naulakha.

Nepal Mentha Product Limited Managing Director Rakesh Adukiya, who is related to Gurkha’s promoter firm Krishi Premura Holding; loanees Sajeev Kumar Agrawal and Jeevan Ghimire; Adukiya wife Ruchi and Punam Khetan, directors of Krishi Premura, were also among those facing the central bank’s action.

Source: Kantipur