Kathmandu. Nepal Rastra Bank (NRB) has taken action against three commercial banks. Two of the banks are also government-owned. Nepal Rastra Bank (NRB), Rastriya Banijya Bank, Agricultural Development Bank and Prabhu Bank are the major banks.

KATHMANDU: The Rastriya Banijya Bank (RBB) has violated the provisions mentioned in Regulation 5 (1) of the Bylaws Related to Freezing and Releasing Bank Accounts, 2081 issued by the Rastra Bank. The NRB has also warned the Rastriya Banijya Bank (RBB) to make arrangements to freeze bank accounts on time as per the provisions of the Bye-law, 2058 BS for not complying with the directives of the Nepal Rastra Bank.

Similarly, during a special on-site inspection of the Agricultural Development Bank, it was found that the bank did not freeze it on time as per the request of Nepal Rastra Bank and the law enforcement body. The Agriculture Development Bank (ADB) has been warned as per the sub-section 1 (a) of Section 100 of the Nepal Rastra Bank Act, 2085 to freeze or release the bank account as soon as the request is received as per the provision related to freezing of bank accounts as per the provisions of the Bylaws on Freezing and Releasing Bank Accounts (with first amendment) for violating the directives of the Nepal Rastra Bank.

Likewise, the board of directors of Prabhu Bank was earlier warned by the bank that the bank was not taking initiative to rectify the serious shortcomings seen in the overall site inspection report, 2081 BS.

The Board of Directors of Prabhu Bank Limited was made to take corrective steps as per Section 100 (1) (b) of the Nepal Rastra Bank Act, 2058 (including amendment) as the bank did not see the expected improvement during the risk-based comprehensive on-site inspection conducted in 2082 BS on the basis of the raw financial statements of Chaitra 2081.

Similarly, in the past comprehensive inspection reports of Prabhu Bank, it has been found that the bank has violated the directives issued by the central bank time and again.

According to the Bank’s Comprehensive Inspection Report 2082, it has been found that most of the deficiencies mentioned in the previous inspection report have not been corrected and adequate loan loss provisions have not been maintained without classifying the loans as per the directives of the Integrated Directive, 2081 issued by the Rastra Bank.

Similarly, the then Chief Executive Officer of the NRB Ashok Sherchan has been fined Rs 500,000 as per Section 100 (2) (c) of the Rastra Bank Act, 2058 (including amendment) for submitting loan details in a way that is different from the loan details received from the bank’s core banking system.