Thursday, December 26, 2013

Central bank to seek clarification from NCC Bank

Central bank is going to seek a clarification from the NCC Bank on why its board should not be dissolved and taken over as the power tussle might hit the financial health of the bank and send negative message in the financial market.
Since the daily operation of the bank has also been started being affected by the tug of war between the two warring sides, "the central bank has to intervene but it is under discussion on how to intervene," according to a senior central bank official. "After the board room dispute came out in public and one group sought the help from the central bank, Nepal Rastra Bank is, most possibly, seeking clarification on Friday, before taking over. As both the factions have been blaming each other for corruption and financial indiscipline, the central bank should also take action to save the financial health of the bank and and depositors' trust on it."
The board room dispute started after the board split into two groups favouring NB Group – which has its key members on the run after they have been booked by the Nepal Police for financial crimes – and Nirmal Pradhan, a stock investor.
The power tussle that started a year ago, reached the central bank last week, after some six board members near to the NB Group tendered their resignation to the monetary authority.
Likewise, the NB Group and Nirmal Pradhan-led group is trying to get hold of not only Nepal Credit and Commerce Bank – that witnessed its stocks being traded at Rs 440 per unit today – but also National Hydropower that has been trading its stocks at around Rs 80 these days due to suspicious transactions and financial indiscipline by the notorious NB Group.
Nepal Bangladesh Bank – also promoted by the NB Group – was taken over by the central bank some 10 years ago due to financial indiscipline and bad corporate governance. In recent years, corporate governance has become a serious issue with the financial institutions.

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