Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) has taken action against the bank’s board of directors and chief executive officer (CEO) of Himalayan Bank.

During the overall on-site inspection based on the risk of the bank, it was found that a limited number of borrowers were exempted from the prescribed premium rate effective from a later date and the discount amount was used to pay the arrears, interest and principal.

The bank has been found to have rescheduled/restructured the loan by receiving 10 percent of the interest amount to be paid after the stipulated time, classifying only the principal amount of the outstanding installment in the rescheduled/restructured loan into a loan and classifying the remaining amount as a good loan and not maintaining adequate credit loss provisions.

Likewise, the repayment period of borrowers has been extended temporarily for a longer period and those with arrears of more than 90 days have not been classified as bad loans.

It has not been found that adequate credit loss provision has been maintained in such loans. The NRB has warned the Board of Directors and Chief Executive Officer of the bank as per the sub-section 2 (a) of Section 100 of the Nepal Rastra Bank Act, 2058 (including second amendment 2073) for violating the provisions of the Integrated Directive 2081 issued by the bank.

The Board of Directors of Himalayan Bank Limited has been issued a memorandum of understanding to take corrective steps for violating the directives issued by the bank as per the sub-section 1 (b) of Section 100 of the Nepal Rastra Bank Act, 2058 (including second amendment 2073).