Nabil, NB Group going tit-for-tat

KATHMANDU, SEP 17 -

In what could be seen as a tit-for-tat move between two banking groups, Nabil Bank has issued a 35-day notice to Nepal Bangladesh Bank promoters to repay the entire loan provided to three companies promoted by NB Group—Kathmandu Recreation Center, Sangrila Investment and Siddhi Ganesh Investment.

In the notice issued on Saturday, Nabil Bank has warned NBB promoters Laxmi Bahadur Shrestha, Purna Bahadur Shrestha, Anar Devi Shrestha, Jen Shrestha and Jit Bahadur Shrestha of auctioning of the collateral and recommending the Credit Information Bureau (CIB) to blacklist them if they fail to make payment within the stipulated time.

The Nabil Bank’s move follows hot on the heels of similar action from the NBB and Nepal Credit and Commerce (NCC) Bank, promoted by the NB Group.

On September 11, the CIB had blacklisted Nabil Chairman Satyendra Pyara Shrestha and his partners, after they did not heed a 35-day notice from the NBB asking them to pay the loan extended to Amie Pharmaceutical. Earlier, the NCC, which also has outstanding loans against the pharmaceutical company, had issued a 35-day notice to repay the loans. Nabil chairman and his partners have an outstanding loan, amounting to Rs 40 million to the NBB, and an additional Rs 10 million to NCC Bank.

Although officials on either side claim the current tussle just a coincident, knowledgeable sources said blacklisting and issuance of 35-day notice are reflection of conflict between the two groups.

A source at Nabil said that blacklisting of its Chairman Shrestha by the NBB and 35-day notice issued by the NCC were in fact vengeful move following mounting pressure from the former on NB group to pay loans. 

A Nepal Rastra Bank official said that the current tussle between the two sides portrays how loans are provided in cohort of promoters of one bank to another.

“While the two groups had good relations, the loans were given to the promoters and directors of each other without considering each other’s track records,” said an NRB official. “But no sooner their relations soured, they resorted to blacklisting each other in a tit-for-tat move.”

Interestingly, the former acting CEO of Nabil, Amrit Charan Shrestha, is now the chief executive of the NCC.

Asked about the NCC and Nabil both issuing 35-day notice within a few days of each other, the NCC CEO said that the notices were issued as per the regular process of loan recovery.

NBB CEO Gyanendra Dhungana made a similar response, saying that the Nabil chairman and others were blacklisted as per the normal legal process following their failure to pay the loans within the fixed deadline. According to Dhungana, the collateral put by the former governor and his partners against their loans from NBB are currently in the auction process and that the bank has received one bidder for the plot of land in Biratnagar. “Now, Shrestha is in our contact and has assured of paying the loans soon,” he said.

Nabil officials also denied that the notice was not published in revenge. “The borrowers had committed to settle the loan within the end of August,” said a Nabil source. “As they failed to pay even after 15 days of committed deadline, we had to issue notice.”

With the value of collateral put up against the loan much higher than loan amount, another Nabil source added they were confident of loan recovery. “They will not risk the valuable land in Sanepa, Lalitpur, go under the hammer.”

Source: The Kathmandu Post