The Nepal Rastra Bank (NRB) team that took over the management of troubled H&B Development Bank has said it will forward the claims of those submitting fraudulent good-for-payment cheques to the Department of Money Laundering Investigation.
The central bank has asked the team to make payments to those making genuine claims and forward the details of the fraudulent ones to the department and other authorities concerned.
After the previous management failed to comply with a similar order, the NRB took over the bank’s management on Wednesday.
NRB Deputy Director and leader of the team Gyanu Krishna Adhikari said they have started investigation into genuine good-for-payment cheque holders.
“We will start making payments against genuine cheques,” he said.
“But the cases of fraudulent cheques will be sent to the anti-money laundering department for further investigation and necessary action,” he said.
According to Adhikari, the bank has received claims worth Rs 810 million under good-for-payment cheques. These include both the claims from individuals as well as from institutions.
The chief culprit in the scam, Niraj Nepal, was found embezzling Rs 110 million. He had stolen the money by debiting the accounts of depositors and increasing loan amounts of borrowers without notice.
“However, the bank has already made reimbursements of those embezzlements,” said Adhikari.
In order to cover the liabilities, the H&B has provisioned Rs 426.1 million, which has increased its total provisioning to Rs 780 million.
As a result of such a huge provisioning, the bank incurred loss of Rs 160 million as of the third quarter of the fiscal year. The central bank’s cap on H&B’s lending and its relatively higher liquidity position resulted in the loss, according to Adhikari.
Nepal, who was the bank’s Kuleshwor branch chief, made payments against cheques issued by traders Manoj Chaurasiya and Jaya Kumar Yadav although their accounts did not have sufficient balance. However, those receiving good-for-payment cheques are now making claims.
source: the kathmandu post,2 june 2014
LINK
The central bank has asked the team to make payments to those making genuine claims and forward the details of the fraudulent ones to the department and other authorities concerned.
After the previous management failed to comply with a similar order, the NRB took over the bank’s management on Wednesday.
NRB Deputy Director and leader of the team Gyanu Krishna Adhikari said they have started investigation into genuine good-for-payment cheque holders.
“We will start making payments against genuine cheques,” he said.
“But the cases of fraudulent cheques will be sent to the anti-money laundering department for further investigation and necessary action,” he said.
According to Adhikari, the bank has received claims worth Rs 810 million under good-for-payment cheques. These include both the claims from individuals as well as from institutions.
The chief culprit in the scam, Niraj Nepal, was found embezzling Rs 110 million. He had stolen the money by debiting the accounts of depositors and increasing loan amounts of borrowers without notice.
“However, the bank has already made reimbursements of those embezzlements,” said Adhikari.
In order to cover the liabilities, the H&B has provisioned Rs 426.1 million, which has increased its total provisioning to Rs 780 million.
As a result of such a huge provisioning, the bank incurred loss of Rs 160 million as of the third quarter of the fiscal year. The central bank’s cap on H&B’s lending and its relatively higher liquidity position resulted in the loss, according to Adhikari.
Nepal, who was the bank’s Kuleshwor branch chief, made payments against cheques issued by traders Manoj Chaurasiya and Jaya Kumar Yadav although their accounts did not have sufficient balance. However, those receiving good-for-payment cheques are now making claims.
source: the kathmandu post,2 june 2014
LINK
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