Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) has taken action against Laxmi Sunrise Bank for violating regulatory provisions. According to the third quarter supervision report of the financial year 2080/81 released by the Department of Bank Supervision (DOBV), the then financial manager of the bank has been fined Rs 1 million and the Chief Executive Officer (CEO) has been alerted.
According to the NRB, the bank had included social responsibility expenses while calculating the base rate against the Integrated Directive, 2079. Also, unlike the Capital Adequacy Framework, 2015, the Capital Adequacy Ratio has been calculated by showing the risk weight of some loans as lower than the actual.
According to the NRB, the bank found that out of the loan disbursed to borrowers belonging to promoter shareholder Rajendra Kumar Khaitan, who owns more than 1 percent of the bank’s shares, around Rs 114.4 million was transferred to the accounts of its shareholders. It has concluded that the transaction was against the provisions of the Bank and Financial Institutions Act, 2073 BS.
Similarly, the NRB report states that the bank has maintained the loan in a regular state without effective monitoring of the money transferred to the shareholders’ accounts.
Nepal Rastra Bank (NRB) has imposed a fine of Rs 10 lakh on former financial manager Rajendra Kumar Khetan for his deficiencies. The bank also cautioned the CEO of the bank for not implementing the regulatory provisions in an effective manner as per Section 100 of the Nepal Rastra Bank Act, 2058.
