Sunday, February 9, 2014

Central bank team takes charge of Nepal Share Markets and Finance from today

A three member team of central bank took charge of the Nepal Share markets and Finance from today.
The team led by deputy director Santosh Kumar Ghimire, has assistance directors Kaji Ram Karki and Prakash Shrestha will sell shares or bring in new investors to increase capital, find merger partner, recover the remaining amount – Rs 2.13 billion – by the then executive chairman Yogendra Shrestha, and prepare a report within the six months and submit to the central bank to either run or sent to liquidate the Class C financial institution.
According to the due diligence report (DDA), Shrestha had embezzled Rs 2.68 billion. Shrestha was involved in insider lending against the good governance and prudential norms of banking.
Though late, the central bank's board had taken the decision to take over the board and management of troubled Nepal Share Markets and Finance last Thursday.
According to the regulation, a financial institution that is declared troubled has to be taken over by the central bank, if it does not improve within six months or sent to the liquidation. But the central bank gave it more than enough time to improve.
Central Investigation Bureau (CIB) last year had arrested Shrestha for his involvement in creating fake borrowers and misusing the deposits of the public. He is still in the jail.
Earlier last week, the central bank has taken over the management of the NCC Bank suspending the board due to prolonged dispute among the board of directors.
Likewise, in 2006, the central bank had taken over the Bank of Kathmandu and returned it within three months. However, the central bank has failed to improve the financial health of Gurkha Development Bank – that it has been handling since last two years – and is still managing it.

No comments: