Sending jitters through the banking sector, the Commiss-ion for Investigation of Abuse of Authority (CIAA) has sought details about the balance sheets and clients from commercial banks.
Bankers said they have been asked to submit details about up to three generations of some borrowers, balance sheets, share transactions, share holding and old loans.
“The CIAA has demanded details of borrowers taking loans worth more than Rs 10 million from some banks, while the others have been asked to furnish details of borrowers taking loans above Rs 5 million,” said a CEO of a commercial bank.
He said the banks have been asked to submit details under the appendix of the publicly available information too.It seems there are two central banks in the country, with the CIAA seeking details like the Nepal Rastra Bank (NRB), said another banker.
CIAA Spokesperson Shree-dhar Sapkota said he has also heard about the CIAA’s move to seek the details of banks through the central bank. “Though I am not informed about this, I have heard about it. I can provide details only tomorrow,” he said. However, bankers said the CIAA approached them directly, rather than coming through the central bank.
The clause 79 of the Bank and Financial Institution Act 2006 states: “Notwithstanding anything contained in the laws in force, the relationship between a licensed institution and its customers and information pertaining to its accounts, records, books, ledgers and statements shall not be disclosed to any person other than the concerned person.”
The clause has allowed BFIs to provide the details about accounts of a person, firm, company and institution and licensed institutions if the Finance Ministry and the NRB direct them for any specific investigation by disclosing the reasons for demanding the information.However, bankers said they have been asked the details without showing any specific reason for the investigation.
A senior central bank official said he was not aware of the CIAA’s move. He said the CIAA could seek the details from banks for investigation purpose, but the job of regulating financial institutions is the central bank’s job.
However, a banker said the central bank has just been a casual bystander. The CIAA’s move will have larger repercussions because there are chances that client details are compromised, he said.
The CIAA has formed a team of experts to look into irregularities related to the banking sector. The panel comprises retired bureaucrats, chartered accountants and management experts.
Sources said even the investigation officer assigned to look into banking and financial sector has been bypassed.
Source: ekantipur, 15-Nov-2013
Bankers said they have been asked to submit details about up to three generations of some borrowers, balance sheets, share transactions, share holding and old loans.
“The CIAA has demanded details of borrowers taking loans worth more than Rs 10 million from some banks, while the others have been asked to furnish details of borrowers taking loans above Rs 5 million,” said a CEO of a commercial bank.
He said the banks have been asked to submit details under the appendix of the publicly available information too.It seems there are two central banks in the country, with the CIAA seeking details like the Nepal Rastra Bank (NRB), said another banker.
CIAA Spokesperson Shree-dhar Sapkota said he has also heard about the CIAA’s move to seek the details of banks through the central bank. “Though I am not informed about this, I have heard about it. I can provide details only tomorrow,” he said. However, bankers said the CIAA approached them directly, rather than coming through the central bank.
The clause 79 of the Bank and Financial Institution Act 2006 states: “Notwithstanding anything contained in the laws in force, the relationship between a licensed institution and its customers and information pertaining to its accounts, records, books, ledgers and statements shall not be disclosed to any person other than the concerned person.”
The clause has allowed BFIs to provide the details about accounts of a person, firm, company and institution and licensed institutions if the Finance Ministry and the NRB direct them for any specific investigation by disclosing the reasons for demanding the information.However, bankers said they have been asked the details without showing any specific reason for the investigation.
A senior central bank official said he was not aware of the CIAA’s move. He said the CIAA could seek the details from banks for investigation purpose, but the job of regulating financial institutions is the central bank’s job.
However, a banker said the central bank has just been a casual bystander. The CIAA’s move will have larger repercussions because there are chances that client details are compromised, he said.
The CIAA has formed a team of experts to look into irregularities related to the banking sector. The panel comprises retired bureaucrats, chartered accountants and management experts.
Sources said even the investigation officer assigned to look into banking and financial sector has been bypassed.
Source: ekantipur, 15-Nov-2013
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