Dev Bankers Association & Vibor Society Dev Bank address false news regarding Good for Payment cheque

Vibor Society Development Bank Limited and Development Bankers Association Nepal have addressed the ongoing false news, defamations and disruption in bank’s branches as a result of its "Good for Payment" cheque debacle of 2012. Former H&B Development Bank, before merger with Vibor Bikas Bank, had issued Good for Payment cheques worth Rs 87 crore from its Kuleshwor branch. However, the employee concerned with issuing the cheques failed to check the deposit in the account against those checks. The development bank incurred millions of rupees in loss due to the fraud allegedly committed by chief of Kuleshwor branch, Niraj Nepal, in collusion with some traders, while issuing the Good for Payment cheques. However, the bank has already made agreements with and has been paying its liabilities as a result of issuance of those checks, said the press release issued by Vibor Society Development Bank. The bank further says that it will be able to further fulfill its liabilities after receiving the money from the defendants. Due to this, disrupting the bank’s service, defaming its staffs and name by publishing false news and allegations is baseless, added the statements. According to Nepal Rastra Bank, former H&B Development Bank had to make total provisioning of Rs 66.55 crore, including for the illegally paid amount of Rs 42.61 crore, Rs 14.2 crore based on the risk after the supervision, and the bank’s existing provision of Rs 9.91 crore. Under the prompt corrective action, the bank had been asked to submit a recapitalization plan, not to announce cash dividend and bonus shares, not to open new branches and collect deposits in excess of 10 percent of the deposits maintained on November 25, 2013. The bank was also barred from expanding credit more than the size maintained on November 23, 2013. Following this, H&B Development Bank changed its name to Society Development Bank Limited in April 2015 before subsequently merging with Vibor Bikas Bank in September 2016. In February 2017, Vibor Society Development Bank and Lumbini Finance and Leasing Company signed agreement for merger. They have already received final approval from NRB, after which they will start joint operation in the name of Lumbini Bikas Bank Limited with paid up capital of more than Rs 2.37 arba.