KATHMANDU, Feb 22: Nepal Rastra Bank (NRB) took action against four commercial banks for breaching the rules enforced by the regulator.
According to the NRB, Laxmi Bank, Standard Chartered Bank Nepal, Global IME Bank and Rastriya Banijya Bank were among the ‘A’ class banks that faced action by the central bank during the first six months of the current fiscal year. Of these, Standard Chartered Bank Nepal paid a cash fine of more than Rs 5.78 million for failing to invest in the primary sector as per the NRB guideline. Also, the joint venture bank was found providing loans to its customers who had not submitted all necessary documents.
According to the Monetary Policy 2020/21, banks are required to provide at least 25 percent of their lending to priority sectors, such as agriculture, energy, tourism, and micro, small and mid-size enterprises. The central bank has sought to increase this proportion to 40 percent by 2024.
Similarly, NRB slapped a cash fine of Rs 2 million on Laxmi Bank for not abiding by the provisions of Money Laundering Prevention Act 2008. The central bank has cautioned the Global IME Bank for issuing loans without receiving tax clearance certificates from its clients.
Likewise, Rastriya Banijya Bank was found not depositing the collected government revenue in the state account on time. According to the NRB officials, the state-owned commercial bank had put on hold the collected revenue for up to two months. As per the law, the banks need to deposit the revenue just on the next day of the collection.
The central bank traced the anomalies practiced by the leading commercial banks during onsite monitoring of these banks.