NBB asks NSLMB loanees to repay loans

KATHMANDU, NOV 04 -

Nepal Bangladesh Bank (NBB) on Saturday issued a 35-day notice in the name of 11 people close to the NB Group, the key promoter of the bank, asking them to repay loans taken from Nepal Sri Lanka Merchant Bank (NSLMB), which has been merged with NBB. It is probably the first time that NBB has issued a notice to those close to and relatives of NB Group promoters.

Jas Shrestha, son of NBB board member Jit Bahadur Shrestha, is one of the loanee. Jit Bahadur’s daughter-in-law Gita Shrestha and other close relatives, including Remashwor Prasad Shrestha and his son Nabin Shrestha, have also been asked the repay the loans taken some four years ago from the finance company.

Other loanees include Krishna Prasad Bhandari, Mani Pandey, Thirraj Dahal, Bijaya Kumar Shrestha, Surendra Bahadur KC, Shailendra Kumar Shrestha and Dev Bahadur Shrestha. They had taken loans worth around Rs 350 million from the company, according to a NBB source.

Most of them received loans by putting up NB Group-promoted companies’ shares in NBB and Nepal Credit and Commerce Bank as collateral. These two banks are also promoted by the NB group. “We issued the notice after we found that the loans were related to insider lending,” said NBB CEO Gyanendra Dhungana.

The bank is not sure where the loans were used although they were taken for investing in industry and other business es. The bank said in the notice that the loanees concerned will be blacklisted and legal action will be initiated if the loans were not paid within the deadline.

The NBB action has come after NCC Bank blacklisted Laxmi Bahadur Shrestha, Jit Bahadur’s brother, for issuing bouncing cheques repeatedly one and half months ago as per the request of Chitwan-based Subhechchha Development Bank.  The law also states that any person or firm issuing checks with the knowledge that their account does not hold sufficient funds will be blacklisted.

A senior Nepal Rastra Bank (NRB) official said the action taken by the two banks were the result of continued pressure from the central bank to recover promoter-related loans. “We have warned both the banks that we can no longer give concession in recovering loans if they don’t step up efforts to recover promoter-related loans,” said the NRB official.

Source: The Kathmandu Post