NRB has issued circular to all banks and financial institutions to provide details of those who have opened bank accounts between January 14 and February 12, 2009. The circular issued Tuesday has directed them to supply detailed information on the personal or institutional accounts like saving account, current account and investors´ account, among others.
A highly placed NRB official told myrepublica.com that the central bank is starting an investigation soon over the allegedly widespread use of fake documents to open new bank accounts while applying for shares under Initial Public Offerings (IPOs) by two commercial banks, Citizens Bank Limited and Bank of Asia.
As per the new regulations, investors will get their money back for shares not allotted to them through account payee checks, which can only be deposited to their bank accounts.
We have received reports that a large number of new bank accounts for the purpose of applying under IPOs are being opened by submitting citizen certificates of other persons, who are unaware about the bids. “By opening a bank account with forged documents, the wrongdoers can operate the bank account and withdraw the refund money for shares not allotted,” said the official.
In some cases, photograph attached to the certificate have been reproduced with the help of digital technologies to produce a fake certificate, said the official. He further said the problem is widespread among all financial institutions but chronic in case of finance companies.
The NRB plans to begin the investigation before the final allotment of the two banks’ shares and freeze the account of those who applied with forged documents, the official said. He said that the banks and financial institutions could face action for not properly checking the documents submitted by account holders.
According to the newly enforced regulations by the Security Board, investors willing to purchase shares under IPOs of banks need to have an account in any financial institutions for getting refund for shares not allotted to them.
In addition, investors applying for shares worth Rs 50,000 at any given time will have to issue an account payee check in the name of the financial institution that collects the applications.
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