Bank of Kathmandu and Himalayan Bank Limited Finally Receives the Full Amount of the Bank Guarantee from Chinese Bank

Bank of Kathmandu and Himalayan Bank finally receives full amount against the guarantee for the Melamchi water supply project.

Himalayan Bank Limited (HBL) and Bank of Kathmandu Limited (BoK) had filed legal action against China Railway 15 Bureau Group in China to recoup Rs 1.6 billion in counter-guarantee funds from China Construction Bank (CCB).

After hearing the case, the High People's Court of Henan Province found in favor of the two Nepali Banks instructed the CCB to give HBL and BoK their performance guarantee and advance payment guarantee, respectively.

BoK had provided the Melamchi Water Development Board with advance payment guarantees of $6.62 million and 1.41 million euros, while HBL had issued $6.665 million as performance guarantee in order to give the counter-guarantee to CCB. The China Railway 15 Bureau Group was guaranteed by the CCB.

However, the Melamchi Water Supply Development Board terminated the agreement with the Chinese company in September 2012 as the company did not complete the project in accordance with the agreement

In the same year, the Patan High Court mandated that HBL and BoK pay the Melamchi project's guarantee sum.

Now, after all these years BOK and HBL receives the amount which was due to them.

Hence, the entire bank expressed its sincere gratitude and thanks to the Government of Nepal and the concerned Nepali Embassy, the Embassy of the Republic of China in Nepal, the director and staff of the Melamchi Water Supply Development Committee of Nepal Rastra Bank, who directly and indirectly helped in making the payment of the guarantee amount.