Kathmandu. Nepal Rastra Bank (NRB) has taken action against two commercial banks and two finance companies for violating the rules.
The central bank has taken action against Citizens Bank and NIC Asia Bank, Pokhara Finance and Grihashwori Merchant Banking and Finance for violating the rules in the fourth quarter of the current fiscal year. Citizens Bank has issued unified directive no. Point No. 6. It has been found that the bank has increased the facility of chief executive officer by amending the contract agreement of the chief executive officer of the bank in violation of the provision in Section 4 (13) and against the instructions sent by the Bank and Financial Institutions Regulation Department of the Rastra Bank. The Board of Directors of Citizens Bank has been alerted in accordance with Section 100(2)(a) of the Rastra Bank Act, 2058.
Similarly, Citizens Bank has calculated the interest rate difference incorrectly, has repaid old loans and interest by issuing new loans, and the payment of claimed bank security has been issued by the Unified Directive No. Point No. 2. The CHIEF Executive Officer has been warned in accordance with Section 100(2)(a) of the Rastra Bank Act for not maintaining the provision of aging wise loan loss in the loans that have been extended temporarily for a long time, not fully complying with the provisions of the current capital guidelines issued by the Rastra Bank, 2079, and wrong reporting of the loans disbursed in the specified areas.
On the other hand, it was found that the borrower was charged more interest against the provisions mentioned in the Unified Directive 2074 (E.P. Directive No. 15/074, Point No. 2, 5 (e)) issued by the Rastra Bank at that time, the type of loan in the agreement with the borrower, the applicable interest rate (fixed÷chanizable), the provision related to installments, etc. Point No. 20/081. NIC Asia Bank has been alerted in accordance with Sub-section 1 (a) of Section 100 of the Rastra Bank Act as it has not been found to have been mentioned in simple and clear language as per the provision mentioned in Section 1 and clear and the information of changing the interest rate has not been given to the borrower.
Nepal Rastra Bank (NRB) has imposed a cash fine on Pokhara Finance. According to the NRB, a fine of Rs 3,277,676.35 has been imposed as per the existing arrangement for not maintaining the minimum mandatory reserve amount for the period from February 27 to April 23, 2018.
Similarly, The Rastra Bank has taken action against Guheshwori Merchant for violating three rules. According to the NRB, it has been alerted in accordance with clause (a) of Sub-section (2) of Section 100 of the Rastra Bank Act as the loss management and classification of the organization has been found to be ineffective in the reporting done with the Rastra Bank and the loan has been regularized by issuing additional loans to recover the outstanding interest-installment of some loans and due to all these reasons, the financial statement of the organization is not realistic.
Similarly, contrary to the provisions contained in clause (b) of Sub-section (1) of Section 14 of the Banks and Financial Institutions Act, 2073, the organization did not appoint the post of director vacant before the Annual General Meeting even before the Annual General Meeting, did not go through the process of election for the appointment of a vacant director in the Annual General Meeting and appointed a director from the Board of Directors only after the completion of the Annual General Meeting. Guheshwori Merchant has been alerted through separate letters pursuant to (a).
According to the NRB, Grihaswari Marchen has been warned through separate letters that the appointment of the post of director, which fell vacant before the Annual General Meeting in violation of the Bank and Financial Institutions Act and the Rastra Bank Act, did not go through the election process for the appointment of directors and appointed a director only after the completion of the Annual General Meeting.
