Nepal Rastra Bank Penalizes Three Financial Institutions Over Regulatory Breaches

Nepal Rastra Bank (NRB), the country’s central bank, has taken disciplinary action against three financial institutions, Narayani Development Bank, Saptakoshi Development Bank, and Reliance Finance for breaking regulatory rules during the fourth quarter of the fiscal year 2082/83.

Narayani Development Bank ran into trouble over its lending practices. When NRB previously removed the bank from its list of troubled institutions, it set a strict condition: total loans and credit facilities to any single customer, business, or connected group of clients could not exceed 10% of the bank's core capital. An investigation revealed that the bank violated this threshold during the 2024/25 fiscal year (FY 2081/82). As a result, the central bank issued an official caution to Bishnu Regmi, who served as Chief Executive Officer during that period, instructing him to ensure such errors do not happen again.

Saptakoshi Development Bank was called out for severe internal management failures following a routine inspection based on its financial statements from mid-October 2025 (Ashwin 2082). Inspectors discovered missing cash in the bank’s vault along with unauthorized employee access to customer accounts. The central bank noted that even after learning about these breaches, Saptakoshi's management failed to conduct a thorough investigation, punish those responsible, or update its internal control policies to prevent future abuse. The institution was issued a formal warning to fix its operational oversight.

Reliance Finance faced a financial penalty for failing to maintain its required cash reserve levels between February 22, 2026, and April 18, 2026 (Phagun 10, 2082 to Baishakh 5, 2083). Because the company fell short of keeping the mandated amount of liquid cash on hand, the central bank fined it NPR 2,924.48 in accordance with current financial regulations.