Committee to investigate bank officers on loan default issues

KATHMANDU, April 22: A high-level committee formed by the government to deal with the cases related to willful loan defaulters has initiated investigations against the official banks responsible for sanctioning the troublesome loans. [break]



To begin the process, the committee has asked the Chief Executive Officer of the semi-state-owned Nepal Bank Limited to present themselves on Wednesday for consultation before the committee. “The committee will invite the CEOs of the other commercial banks for consultations in days to come,” said a member of the committee.



“The consultations with the CEOs of the banks is being carried out to lay the groundwork for the proposed investigation and to ensure the CEOs’ full support towards the investigation,” the committee member said.



“Until now, all our efforts have been focused on the willful defaulters, to compel them to pay back the loans to banks. Now, we are focusing attention on those officials who didn’t follow the rules and regulations while issuing loans to doubtful borrowers,” said the official.



A preliminary investigation on some of the big troubled loans has revealed that there were gross violations of established rules and regulations during the extending of loans. “In cases related to the big loan defaulters, the committee found that the concerned loan officials had issued second, and even third, installments without meeting the minimum loan conditions,” said the official.



The committee, headed by Constituent Assembly member Hari Rokka, has also found out that the banks themselves have not been sincere enough in their attempts to recover the past bad loans; they haven’t even tried to recover debts by selling off the collaterals that were put up by the defaulters. “Some of the big banks seem to have emphasized the recovering of only some of the bad loans, depending on how the retrieval would protect or go against the vested interests of some of the people concerned, and the committee is also looking into such cases,” said the official.



The government recently formed the committed to monitor various procedures that the state had initiated against the big willful defaulters, who have altogether defaulted on a total loan amount of around Rs 20 billion from the banking system.

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