Nepal Rastra Bank (NRB) has imposed a fine of Rs 148.5 million on Standard Chartered Bank Nepal for failing to meet the minimum loan disbursement requirements in specified sectors. The penalty pertains to the second quarter of fiscal year 2024/25, ending in mid-January 2025, during which the bank did not achieve the mandated credit allocation set by the central bank.
In addition to this, NRB has taken regulatory action against four other banks and their senior officials, including chief executive officers, for various lapses in compliance and governance.
At Nepal Bank Limited, former chairman Chandra Bahadur Adhikari has been fined Rs 500,000 for misuse of loans. The bank’s CEO, Tilak Raj Pandey, has been issued a warning for his failure to effectively carry out responsibilities as per the agreement between the bank and the CEO. The central bank cited shortcomings such as failure to implement the strategic plan and annual programs, delays in loan approvals and renewals, and lack of coordination among senior management.
Similarly, the CEO of Laxmi Sunrise Bank, Ajaya Bikram Shah, has been warned for non-compliance with NRB’s directives, including the provision of loans to a promoter shareholder in violation of regulatory rules. The bank was also found to have failed in the proper classification of loans and in setting aside adequate loan loss provisions in line with the volume of non-performing loans.
The CEO of Kumari Bank, Ram Chandra Khanal, has also received a warning from NRB for improperly classifying non-performing and watchlist loans. He has been cautioned not to repeat such practices.
NRB’s recent actions follow its findings that several commercial banks were avoiding proper classification of non-performing loans, thereby concealing the actual state of their asset quality and underreporting bad loans. The central bank emphasized the importance of stricter compliance to ensure sound banking practices and financial stability.
