Kathmandu. Nepal Rastra Bank (NRB) has opened the way for external audit of 10 big commercial banks.
A joint bench of Justices Dr Manoj Kumar Sharma and Nripdhwaj Niraula on June 19 ruled that the interim order of the big banks would not continue.
With the Supreme Court order, the Rastra Bank has paved the way for the process of conducting audit by international auditors of 10 big commercial banks.
In December last year, the Rastra Bank had issued a notification inviting interested foreign auditors to submit letters of intent for a comprehensive asset quality review (LPR) of nepal’s commercial banks. Among the foreign auditors who submitted the letter of intent, the Rastra Bank had selected Bangladesh’s Hauldar Yunus Company. Satish Subedi, director of S Subedi and Associates, on behalf of Mehra JKSS SSBDI, another company that submitted a letter of intent against this selection, had filed a writ petition seeking an interim order from the Supreme Court, making rastra bank and public procurement monitoring work as defendants.
Nepal Rastra Bank (NRB) has initiated the process of conducting audit by foreign auditors of 10 big banks that have disbursed more loans as per the terms of the International Monetary Fund (IMF). The Government of Nepal and The Nepal Rastra Bank (NRB) had pledged to conduct an audit by international auditors of 10 big banks in order to avail the extended loan facility from the IMF. The IMF had set this condition to provide $ 395 million under the Extended Credit Facility (ECF).
Stating that there is a need for continuous monitoring at a time when bad loans of banks are increasing and there is a shortage of capital, the IMF has stressed the need to immediately review the loan portfolios of 10 big banks. The IMF had also suggested amendments to the Rastra Bank Act and giving priority to external audit to the Rastra Bank.
