KATHMANDU, Oct 22: Nepal Rastra Bank (NRB) has taken action against half a dozen banks and financial institutions (BFIs). The NRB penalized seven banks and financial institutions for violating laws and directives.
In the first quarter of the current fiscal year (FY) 2024/25, the chairpersons, directors, and chief executive officers of three development banks and four finance companies were penalized by the Financial Institutions Supervision Department of the NRB.
NRB has taken action against Sindhu Bikas Bank, Salapa Bikas Bank, Miteri Development Bank, Janaki Finance, Gurkhas Finance, Progressive Finance, and Reliance Finance.
Revised interest rate corridor system introduced
In the first quarter, NRB acted against Sindhu Bikas Bank and Salapa Bikas Bank for delays in submitting their financial statements. The NRB issued warnings to the directors and CEOs of these two banks.
Similarly, Miteri Development Bank was penalized for maintaining an interest rate spread higher than the maximum limit of 4.60 percent, in violation of NRB's directive. NRB also issued warnings to the board of directors and the CEO of Miteri Development Bank.
Likewise, Reliance Finance was fined in cash. NRB reported that Reliance Finance was fined Rs 11,227 for failing to maintain the required cash reserve.
According to NRB, Progressive and Janaki Finance faced action for delaying the submission of their financial statements.
NRB stated that the directors and CEO of Gurkhas Finance were cautioned for failing to abide by NRB directives. The company was warned for conducting transactions with clients in a conflict of interest.
The NRB found that the former chairperson and directors were repeatedly involved in financial transactions with the institution's borrowers and clients through accounts opened in the institution itself.
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