Kathmandu. Nepal Rastra Bank (NRB) has taken corrective action against Saptakoshi Development Bank. Not only that, the Rastra Bank has also advised the CEO.

The action was taken after the minimum capital fund limit of Saptakoshi was reduced by 24.9 percent. The Nepal Rastra Bank (NRB) had conducted an on-site inspection of the Saptakoshi river. During the inspection, it was found that the capital fund ratio of the company was less than 42.7 percent against the minimum capital fund ratio of 10 percent as of Ashad 2081 BS.

Similarly, as per the latest financial report, the minimum capital fund ratio stood at 7.51 percent. This was 24.9 percent lower than the minimum capital fund ratio fixed by the central bank. Therefore, prompt corrective action has been taken as per the provision in clause (a) of Bylaw 3 of the Bylaws Related to Prompt Corrective Action of Rastra Bank, Banks and Financial Institutions, 2074 BS.

The central bank has issued a notice to Dinesh Kumar Pokharel, Chief Executive Officer (CEO) of Shaptkoshi Bank. The on-site inspection report prepared by the central bank, 2081 BS has found that the current capital loans issued by the bank have been extended in the core banking system of the institution without the required documents, the details related to loan loss management are not realistic and the reporting done by the bank is not credible. According to the press release, CEO Pokharel was advised as per Section 100 (a) of the Nepal Rastra Bank Act, 2058 BS for not complying with the directives issued by the NRB.

Similarly, the board of directors of the institution is responsible for rectifying the deficiencies found during the on-site inspection conducted by the Rastra Bank. A written order has been issued to the Board of Directors of the company in accordance with Section 100 (c) of the Nepal Rastra Bank Act, 2058 BS to prevent the recurrence of the mistakes and situations and to be responsible for correcting the mistakes made by the CEO.÷