NRB freezes assets of NSMF boss
Fri, May 6, 2011 12:00 AM on Others,
KATHMANDU, May 6:
Nepal Rastra Bank (NRB) has frozen the bank accounts and property of Yogendra Prasad Shrestha, executive chairman of Nepal Share Markets and Finance (NSMF), on suspicion of irregularities while issuing loans worth Rs 1 billion.
“Our preliminary inspection report reckons Shrestha could have engaged in irregularities in lendings worth a billion rupee,” said an NRB official.
The central bank decided to take further action against Shrestha and freeze his accounts and property after he refused to show the central bank´s inspection team documents concerning various loans.
The NRB inspection team had also found Shrestha making personal use of Rs 200 million that Rastriya Beema Samsthan (RBS), the state-owned insurer, deposited with NSMF.
“We suspect Shrestha could have used the money to finance rights shares,” said the source. Involvement in lending irregularities and use of deposits for personal purposes are serious financial crimes and attract action as per the Banking Offence (Punishment) Act.
If further investigations prove Shrestha guilty of such crime, the central bank will hand the case over to Nepal Police, the source said. Shrestha could then face action, including a jail term of up to three years.
The central bank issued a circular to all banks and financial institutions (BFIs) on Thursday to freeze Shrestha´s accounts. It has also sought an explanation from NSMF why NRB should not land the axe on Shrestha and fine him for his wrongdoing. NSMF needs to furnish its explanation within 15 days.
NSMF is a category D financial institution. However, it has already raised its paid-up capital to Rs 2 billion and completed other formalities with an eye to upgrading itself to a commercial bank. It has also filed an application in this connection at NRB.
The central bank has clarified that misdeeds by Shrestha have not hit the financial position of NSMF so far. “Its financial health is still good. We will just take action against Shrestha,” said the source.
Source: Republica
Nepal Rastra Bank (NRB) has frozen the bank accounts and property of Yogendra Prasad Shrestha, executive chairman of Nepal Share Markets and Finance (NSMF), on suspicion of irregularities while issuing loans worth Rs 1 billion.
“Our preliminary inspection report reckons Shrestha could have engaged in irregularities in lendings worth a billion rupee,” said an NRB official.
The central bank decided to take further action against Shrestha and freeze his accounts and property after he refused to show the central bank´s inspection team documents concerning various loans.
The NRB inspection team had also found Shrestha making personal use of Rs 200 million that Rastriya Beema Samsthan (RBS), the state-owned insurer, deposited with NSMF.
“We suspect Shrestha could have used the money to finance rights shares,” said the source. Involvement in lending irregularities and use of deposits for personal purposes are serious financial crimes and attract action as per the Banking Offence (Punishment) Act.
If further investigations prove Shrestha guilty of such crime, the central bank will hand the case over to Nepal Police, the source said. Shrestha could then face action, including a jail term of up to three years.
The central bank issued a circular to all banks and financial institutions (BFIs) on Thursday to freeze Shrestha´s accounts. It has also sought an explanation from NSMF why NRB should not land the axe on Shrestha and fine him for his wrongdoing. NSMF needs to furnish its explanation within 15 days.
NSMF is a category D financial institution. However, it has already raised its paid-up capital to Rs 2 billion and completed other formalities with an eye to upgrading itself to a commercial bank. It has also filed an application in this connection at NRB.
The central bank has clarified that misdeeds by Shrestha have not hit the financial position of NSMF so far. “Its financial health is still good. We will just take action against Shrestha,” said the source.
Source: Republica
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