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Banks and financial institutions face NRB’s regulatory action

KATHMANDU: Nepal Rastra Bank (NRB) has taken regulatory action against six banks and financial institutions for violating financial rules.

The NRB’s Supervision Department has taken disciplinary action against Prabhu Bank, Global IME Bank, Himalayan Bank, Muktinath Development Bank, Garima Development Bank, and Reliance Finance Limited.

NRB has alerted the CEO of Global IME Bank about increasing the premium rate against regulations and not refunding the amount charged above the interest rate from customers’ accounts.

The central bank has urged caution to Prabhu Bank in maintaining the categorization of loans and expressed concern for not implementing the provision for categorizing loans as non-performing assets despite increasing premium rates.

Similarly, NRB pointed out that Himalayan Bank has not established a system to identify actual wealthy individuals and regularly monitor them, as per the central bank’s directive. Muktinath Development Bank has been penalized with a fine of Rs. 1 million for not conducting cash audits and maintaining a lower cash reserve ratio than the actual requirement.

Garima Development Bank has been cautioned about its weak governance on issues related to compliance with good governance practices.

NRB has informed Reliance Finance about the lack of awareness regarding the issue of administration and has found weaknesses, such as conducting business transactions in joint and personal accounts of the managing director Kush Prasad Mali and other individuals.

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