Kathmandu. Kathmandu: Nepal Rastra Bank (NRB) has decided to spend Rs 6.25 million for loan portfolio review (LPR) of 10 big commercial banks.
The central bank will spend Rs 6,254,912.5 on international auditor Yunus Company of Bangladesh to carry out the LPR of these banks. Rastra Bank has given five months time to the company to complete the external audit.
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.
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. Nepal Rastra Bank (NRB) has selected Bangladesh’s Hauldar Yunus Company among the foreign auditors who have submitted the letter of intent.
Satish Subedi, director of S Subedi and Associates, on behalf of Mehra JKSS SSBDI, another company that submitted a letter of intent against this choice, had filed a writ petition in the Supreme Court seeking an interim order against the Rastra Bank and public procurement monitoring work. However, a joint bench of Justices Dr Manoj Kumar Sharma and Nripdhwaj Niraula ruled that the interim order would not be continued.
