"This is an unexpected blow. NDB shares have turned into scrap and are going to fetch no money," said the former bureaucrat. As Nepal Stock Exchange delisted the NDB shares, barring transactions in them, Ghimire related to myrepublica.com that he had purchased shares using his pension money.
Ghimire had purchased 490 shares at Rs 475 each and another 490 units at Rs 370 each.
Jaya Ranjit of Dallu, another purchaser of NDB shares from the secondary market, related a similar story. "I was actually planning to dispose of the shares, but as the price dipped consistently, I waited for a few more days. Unfortunately, that decision has cost me Rs 120,000," said Ranjit.
NDB´s shares were selling for Rs 126 per unit on Tuesday.
Not only Ghimire and Ranjit, thousands of shareholders of the bank have lost their hard-earned money with the winding up of the bank. Ordinary-share investors had invested more than Rs 100 million - 30 percent of total shares - in the bank.
If the fate that befell shareholders was bad, that of depositors, who had put money in the bank for safe-keeping, was worse.
Subsequent to its Tuesday-night decision, the central bank on Wednesday seized all fixed and liquid assets of the troubled bank including its accounts maintained at other financial institutions and froze all transactions by it. That prevented depositors from withdrawing their own money.
Uddhav Ghimire, a trader from Ramechhap, said he is worried about Rs 240,000 he deposited in the bank, in bits and pieces from the earnings of his small clothing business. "My plans to expand my business have been shattered with the liquidation of the bank," he said.
Like Ghimire, thousands of small depositors faced the unprecedented misfortune in the history of Nepali banking. So much so, institutional depositors such as the Employees´ Provident Fund and the Nepal Army Welfare Fund also doubt they will get their money back.
The bank had deposits of more than Rs 720 million as of mid-March 2009.
Plagued by poor financial health for years, the bank´s accumulated loss stands at Rs 678.6 million, which is higher than the promoters´ share in the bank. The central bank has said that it would be able to say who (among the depositors and shareholders) will get how much back only after the liquidator assesses the bank´s assets and liability.
Following news about the action by NRB, hundreds of worried depositors and shareholders thronged NDB´s head office at Heritage Plaza to inquire about their money and investments. NDB had put up a notice at its main gate stating that all transactions have been put on hold as NRB had taken control over its fixed and movable assets.
The bank depositors, meanwhile, have formed a ´Nepal Development Bank Victims Association´ to press NRB to take the initiative for protecting their deposits. They have announced a sit-in at NRB on Thursday.
Likewise, our correspondent in Pokhara reports that the NRB regional office there has seized cash totaling Rs 10 million from NDB´s branch located at Sabhagriha Chowk.
The cash included Indian currency worth Rs 737,000. However, NRB officials said there is no need for depositors to worry about their deposits as the loans issued by the bank in Pokhara are double the deposits.
Yan Singh Rai, manager at NRB, said NDB has deposits of Rs 30.7 million and loans of Rs 77.26 million. "So, the depositors need not worry about their money, as recovery of the loans will easily enable the bank to return money to depositors," Rai said.
NDB has about 500 depositors in Pokhara. NRB also closed NDB´s ATM located at Amarsingh Chowk.
prabhakar@myrepublica.com
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