NRB reached this conclusion after conducting a thorough study on the financial condition of NDB. The investigation was carried out after NRB decided June 2 to liquidate the bank.
During the investigation, it came to light that NDB had Rs 16.5 million in cash deposits, Rs 95.7 million in savings deposits, Rs 8.49 in time deposits and Rs 193.5 million in other deposits. The study also found that NDB had deposited Rs 160.3 million in other financial institutions, including Nepal Cooperatives, while Rs 332 million comprised matured deposits, i.e. time deposits which were not returned to clients even upon expiry of the deposit period.
After conducting the investigation for more than a week, the central bank once again came to the conclusion that there was no other alternative to liquidating NDB. NRB has said the troubled bank´s cumulative loss had amounted to Rs 690.2 million, as against Rs 640 million claimed by the management; and its non-performing loans stood at 55.09 percent of the loan portfolio. The central bank also found that NDB was maintaining a negative capital adequacy of 48.31 percent as against 11 percent provisioned by NRB.
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