Kathmandu. Due to the negligence of the employees of the Deposit and Credit Protection Fund, the fund has lost Rs 7.5 million in interest in a year.
According to the 62nd annual report of the Office of the Auditor General, the fund has lost interest income of Rs 7.5 million due to a 53-day delay in re-investing Rs 2.5 billion in fixed deposits matured in three banks.
Such a huge amount of money has been lost as the management of the fund did not decide whether to renew the deposit in the same bank or move the deposit to any other bank before the maturity of the deposit. In the report, the Auditor General has told the Fund, “The management should be cautious about investment by taking timely decisions. ’
According to the Investment Regulations, 2074 BS, the investment committee can invest in the term of the bank and the fund management will invest in government loans or call deposits of the bank. It has been carrying out regular activities to earn interest by keeping deposits in banks and financial institutions.
The Fund can completely control unnecessary delays in reinvestment through the use of software that calculates the interest income received from each bank on a daily basis on each deposit in the bank account, the date of maturity of the fixed deposit and the amount to mature. The fund can ensure interest income of 365 days by keeping another fixed deposit on the maturity date.
Insurance companies investing billions of rupees are also monitoring the day-to-day interest income from the use of similar software. Before the deposit matures, they are now able to get prior information about how much interest to re-invest in which bank.
Losses while securing deposits without interest
Section 21(1) of the Deposit and Debt Protection Fund Act, 2073 provides that the annual security fee to be paid by the protected member organization shall be as prescribed by the fund and in Section 19(3), the principal in the deposit account and the interest earned thereon will also be calculated while evaluating the secured deposit amount.
Banks and financial institutions have submitted details to the fund without including the interest earned while calculating the security fee of some fixed deposits. The Auditor General has pointed out that the security fee has been calculated on the amount less than the annual fixed deposit amount due to the calculation of the interest amount in the calculation report of the secured deposit and security fee given by the banks.
