Kathmandu. Nepal Rastra Bank (NRB) has taken action against half a dozen microfinance institutions. As of the third quarter of the fiscal year 2082/083, the government has taken immediate corrective action against 6 organizations.

It has also warned the directors and chief executive officers (CEOs) of the organization.

The NRB has taken action against Aarambh Chautari Laghubitta Bittiya Sanstha, Dhaulagiri Laghubitta Bittiya Sanstha, CYC Nepal Laghubitta Bittiya Sanstha, Nerude Mirmir Laghubitta Bittiya Sanstha, Ganapati Laghubitta Bittiya and Community Laghubitta Bittiya Sanstha. Among them, action has been taken against Nerude, Mirmire, Lagbhitta and CYC Laghubitta Bittiya Sanstha 2 times.

According to the NRB, the microfinance company has maintained the minimum capital fund ratio of only 7.77 percent and the ratio is not as per the regulatory standard.

Likewise, Dhaulagiri has reinstated the Deputy Executive Officer in violation of the provisions of Regulation 95 of the Employees Service By-law, 2080 BS and also provided the amount for the period of absence in the organization without clear grounds and reasons.

Chairman Srijana Thapa and members Suman Prasad Shrestha, Jiwan Acharya, Salik Ram Sharma, Chet Prasad Sapkota, Ganesh Poudel and Resham Lal Sapkota have been cautioned not to carry out such activities henceforth as per Clause 100 (2) (a) of the Nepal Rastra Bank Act, 2058.

Similarly, CYC Laghubitta has been found that the Board of Directors has not followed the expenditure limit and authority as per the financial administration bylaw of the organization while purchasing vehicles.

Chairman Padmanath Sharma, Board of Directors have been asked not to carry out such activities henceforth as per the sub-section 1 (a) of Section 100 of the Nepal Rastra Bank Act, 2058 BS. Tarun Poudel, Laxman Khadka Chhetri, Jeevan Prasad Poudel, Suman Gharti Chhetri, Muna Devi Khanal and Dilip Poudel have been warned against the incident.

Likewise, the institution has maintained the minimum capital fund ratio of only 6.20 percent as of Ashad 2082 BS and the ratio is not in accordance with the regulatory standard.

The NRB has found that Nerude Microfinance has returned the loan loss provision of Rs 81.55 crore and has reported income without ascertaining the details of the loan loss provision of the bank and the income of the lender is in violation of the directives of the bank.

The meeting also cautioned Chief Executive Officer of Nepal Rastra Bank (NRB) Bhojraj Basyal not to repeat such activities as per Clause 100 (2)(a) of the Act 2058 BS.

Similarly, the institution has maintained the minimum capital fund ratio of only 6.01 percent as of the last fiscal year and the ratio is not as per the regulatory standard.

Ganapati Laghubitta has maintained the minimum capital fund ratio of only 6.06 percent as of mid-October last year and the ratio is not in accordance with the regulatory standard.

Similarly, the community microfinance company has also maintained the minimum capital fund ratio of only 6.12 percent as of mid-July and the ratio is not as per the regulatory standard.