Gurkha Development Bank
has called for interested investors to purchase shares from existing promoters.
The management team
deployed by Nepal Rastra Bank (NRB) is publishing a notice inviting interested
entities to buy the bank’s shares and inject capital tomorrow. The new
investors will require to achieve the NRB prescribed capital adequacy and to
minimise the dominance of the existing promoters.
The central bank had
sent a three-member team under NRB deputy director Bisrut Thapa including
deputy director Mukti Sapkota and assistant director Ashok Kumar Rai in early
January to oversee the management of the troubled bank.
The team’s major work
was to improve the bank’s financial health and to find a replacement for the
existing shareholders that ran the bank into the current mess. The national
level development bank ran into trouble after the misappropriation of funds by
its directors and executives. The bank’s bad corporate governance, large scale
insider lending among directors, and dispute among the directors got the bank
declared troubled by NRB in March, 2011.
Three key promoters — DB
Bamjam, Nirmal Gurung and Rakesh Adukiya — have been blamed for the trouble in
the bank that was running well. Bamjam was the bank's chairman when he was
found to be involved in fake lending and is serving a jail term for banking
fraud.
The notice says that only
those interested parties that have never been involved in any banking crime are
eligible to apply within the next 35 days with their plan.
Since March 2011,
various attempts made by the bank to revive its financial health was aborted
mid-way — either due to disagreements between directors or due to disapproval
of the regulator.
The 'B' class
financial institution still has a total of Rs 1.5 billion bad loans and is not
allowed to collect deposits. The ailing development bank will go under
liquidation if things do not work out once again. 
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