NRB declared Nepal Finance Limited crisis-ridden

ShareSansar, December 04:

Nepal Rastra Bank (NRB) has declared Nepal Finance Limited (NFS) as crisis-ridden after their financial status deteriorated due to the negative capital adequacy ratio.

According to Nepal Finance’s Poush end 2070 unaudited report, its paid-up capital stood at Rs 13.48 crore only which should have been Rs 22 crore by Asar end 2070 as per the NRB guidelines. Also, during the same period NFS capital adequacy ratio was negative by 4.36 percent whereas, non- performing loan stood at massive 54.18 percent.

Nepal Rastra Bank found more than 36 percent shares of the company owned by the group and the family of CEO Rabindra Man Pradhan itself.

Nepal Finance has negative net worth and don’t have adequate liquidity to run the normal business smoothly. Hence, they were declared crisis-ridden so that the new depositors would not face troubles and existing depositors also would not face any problem to get their hard earned money back.

After being declared crisis-ridden, the finance company will not be able to collect deposits and make any further lending. Their only job will be to recover loans and repay depositors.

NRB has given six months time frame to the Nepal Finance Limited to take corrective action and also given directives to follow to make the financial condition as per the given standard.

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