Nepal Rastra Bank (NRB) has called back its team from H&B Development Bank, handing over the reins of the class ´B´ bank to a new team of promoters.
NRB Spokesperon Manmohan Shrestha said the central bank handed over the responsibility of the board of directors (BoD) and management to the promoters after improvement was seen in the bank´s financial health.
The central bank had taken over the Kathmandu-based development bank on May 28 after financial health of the latter deteriorated due to the good-for-payment scam worth Rs 801 million. It had deputed a three-member team under the leadership of its deputy director Gyanu Krishna Adhikari at the H&B Bank. NRB deputy director Bishnumani Gautam and Assistant Director Hemraj Adhikari were the other members in the team.
"The bank´s position has improved to a great extent following the takeover. We decided to hand over the responsibility to the promoters after they assured us that they would hold annual general meeting (AGM) with three months and bring the bank on the right track," Shrestha, who heads NRB´s Banks and Financial Institution Regulation Department, told Republica. "We were convinced with the plan forwarded by the new team of promoters."
The new board directors of the bank are Madhav Prasad Acharya, Sushil Raj Parajuli, Gopal Prasad Bastola, Kedarman Karmacharya and Mekh Bahadur Gurung.
According to the plan submitted by the new team to the NRB, the BoD will appoint a new CEO as well as hand over the responsibility to the BoD elected by the AGM which they plan to hold by mid-March next year.
Following NRB´s intervention, the financial health of the bank, which was on the red, has improved. According to the unaudited report for the third quarter of 2013/14 published recently, the bank´s capital adequacy ratio (CAR) stands at 11.44 percent compared to the regulatory requirement of 11 percent.
CAR gauges institution´s capacity to withstand shocks and ability to extend loans.
"The CAR of the bank has also improved. That is why we have lifted prompt corrective action imposed on the bank. Seems like the bank is moving on the right track," said Shrestha.
Immediately after taking over the bank, the team deputed by NRB had formed an expert committee to investigate into the good-for-payment check scam. According to a high-level official of H&B, the bank had set aside 60 percent of the amount of the total scam as provision for possible losses.
"The previous AGM of the bank had decided to pay 60 percent of the check amount, or Rs 480 million, to the holder of the good-for-payment checks, concluding that checks were genuine even though transactions may not be. The NRB team upheld the decision by setting aside the provision for possible losses which means that the bank will gradually have to pay that amount to the bearers," the official added.
Shrestha, however, said that the new board will decide on the payment modality. Then CEO Jasoda Sainju, then chief of the bank´s Kuleshwar branch Niraj Nepal, among other accused, are currently facing banking fraud charges over the good-for-payment scam.
source:SAGAR GHIMIRE ,republica, 18 nov 2014
LINK
NRB Spokesperon Manmohan Shrestha said the central bank handed over the responsibility of the board of directors (BoD) and management to the promoters after improvement was seen in the bank´s financial health.
The central bank had taken over the Kathmandu-based development bank on May 28 after financial health of the latter deteriorated due to the good-for-payment scam worth Rs 801 million. It had deputed a three-member team under the leadership of its deputy director Gyanu Krishna Adhikari at the H&B Bank. NRB deputy director Bishnumani Gautam and Assistant Director Hemraj Adhikari were the other members in the team.
"The bank´s position has improved to a great extent following the takeover. We decided to hand over the responsibility to the promoters after they assured us that they would hold annual general meeting (AGM) with three months and bring the bank on the right track," Shrestha, who heads NRB´s Banks and Financial Institution Regulation Department, told Republica. "We were convinced with the plan forwarded by the new team of promoters."
The new board directors of the bank are Madhav Prasad Acharya, Sushil Raj Parajuli, Gopal Prasad Bastola, Kedarman Karmacharya and Mekh Bahadur Gurung.
According to the plan submitted by the new team to the NRB, the BoD will appoint a new CEO as well as hand over the responsibility to the BoD elected by the AGM which they plan to hold by mid-March next year.
Following NRB´s intervention, the financial health of the bank, which was on the red, has improved. According to the unaudited report for the third quarter of 2013/14 published recently, the bank´s capital adequacy ratio (CAR) stands at 11.44 percent compared to the regulatory requirement of 11 percent.
CAR gauges institution´s capacity to withstand shocks and ability to extend loans.
"The CAR of the bank has also improved. That is why we have lifted prompt corrective action imposed on the bank. Seems like the bank is moving on the right track," said Shrestha.
Immediately after taking over the bank, the team deputed by NRB had formed an expert committee to investigate into the good-for-payment check scam. According to a high-level official of H&B, the bank had set aside 60 percent of the amount of the total scam as provision for possible losses.
"The previous AGM of the bank had decided to pay 60 percent of the check amount, or Rs 480 million, to the holder of the good-for-payment checks, concluding that checks were genuine even though transactions may not be. The NRB team upheld the decision by setting aside the provision for possible losses which means that the bank will gradually have to pay that amount to the bearers," the official added.
Shrestha, however, said that the new board will decide on the payment modality. Then CEO Jasoda Sainju, then chief of the bank´s Kuleshwar branch Niraj Nepal, among other accused, are currently facing banking fraud charges over the good-for-payment scam.
source:SAGAR GHIMIRE ,republica, 18 nov 2014
LINK
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