People's Finance to reopen from Thursday

After three days of closure, People’s Finance is reopening from Thursday.
"The finance company will open from tomorrow as the promoters have accepted to pay the liabilities," said spokesperson of the central bank Bhaskar Mani Gyawali.
The promoters today told the central bank that they will recover Rs 80 million loans and pay their clients, he said, adding that the central bank team is still going through the books of the class C financial institution that has closed its office from Tuesday due to liquidity crunch.
The finance company was forced to close the office after its executive chairperson Chhabilal Bhusal went out of touch since last week. He has been suspected to be involved in financial misappropriation creating fake borrowers.
We will take decision after central bank's three-member team presents its report, Gyawali added. The report will give a clear picture of the company’s assets and liabilities.
It was heavily exposed to land and real estate as its loan exposure to the sector is around 60 per cent apart from its chairman’s faking the accounts.
The other cause of tight liquidity situation in the financial institutions currently is also their heavy dependency on institutional deposits and mismatch between lending and deposit.