NRB freezes passport of former NSMF boss
Wed, May 11, 2011 12:00 AM on Others,
KATHMANDU, May 11:
Nepal Rastra Bank (NRB) on Tuesday decided to freeze passport of Yogendra Prasad Shrestha, former executive chairman of Nepal Share Market Finance (NSMF), for his involvement in irregularities while issuing loans of around Rs 2 billion.
Shrestha already had his assets frozen after preliminary findings of the central bank´s inspection team disclosed his wrongdoing.
“We decided to take further action Shrestha after the inspection team dug out more facts to confirm his wrongdoings,” said a member of NRB board.
The decision was taken on the basis of Bank and Financial Institutions Act (BAFIA) and Banking Offence and Punishment Act.
According to sources, the central bank took stern action after its final investigation found Shrestha of creating fake loans amounting to some Rs 2 billion. The central bank suspects he could have used the money to raise paid-up capital of NSMF. Before issuing the loan, the finance company´s paid up capital was just Rs 430 million. Later, it raised paid-up capital to Rs 2 billion, eying the license of Category A commercial bank.
That is not all. The NRB inspection team even found that Shrestha of using deposits worth Rs 190 million of Citizens Investment Trust (CIT) to serve personal purposes. Earlier, the preliminary investigation had found Shrestha of making personal use of Rs 200 million that state-owned insurer, Rastriya Beema Sansthan (RBS), deposited with NSMF.
“These are serious crimes that have put depositors´ money at grave risk. We are planning further actions to safeguard depositors´ money,” said a source, adding that the central bank would hand over the case to police soon.
If proven guilty, Shrestha could face actions like fines and jail term up to three years.
The central bank also decided to ask the NSMF to carry out the due diligence audit (DDA) to ascertain whether or not the bank´s financial health is frail. It has also instructed the NSMF to instantly resume operations and also cash checks of depositors if they preferred to withdraw their savings without any obstacles.
NSMF has closed down its operations since Thursday after the central bank initiated actions against Shrestha.
NRB on Tuesday also asked the Gurkha Development Bank to resume its operations without further delay and pay back the savings of depositors. The bank has remained closed for more than a month, flouting the banking rules.
Going by the rules, no banks and financial institutions can withhold their services without central bank´s permission. However, NRB had turned blind eye to its affair so far.
Source: Republica
Nepal Rastra Bank (NRB) on Tuesday decided to freeze passport of Yogendra Prasad Shrestha, former executive chairman of Nepal Share Market Finance (NSMF), for his involvement in irregularities while issuing loans of around Rs 2 billion.
Shrestha already had his assets frozen after preliminary findings of the central bank´s inspection team disclosed his wrongdoing.
“We decided to take further action Shrestha after the inspection team dug out more facts to confirm his wrongdoings,” said a member of NRB board.
The decision was taken on the basis of Bank and Financial Institutions Act (BAFIA) and Banking Offence and Punishment Act.
According to sources, the central bank took stern action after its final investigation found Shrestha of creating fake loans amounting to some Rs 2 billion. The central bank suspects he could have used the money to raise paid-up capital of NSMF. Before issuing the loan, the finance company´s paid up capital was just Rs 430 million. Later, it raised paid-up capital to Rs 2 billion, eying the license of Category A commercial bank.
That is not all. The NRB inspection team even found that Shrestha of using deposits worth Rs 190 million of Citizens Investment Trust (CIT) to serve personal purposes. Earlier, the preliminary investigation had found Shrestha of making personal use of Rs 200 million that state-owned insurer, Rastriya Beema Sansthan (RBS), deposited with NSMF.
“These are serious crimes that have put depositors´ money at grave risk. We are planning further actions to safeguard depositors´ money,” said a source, adding that the central bank would hand over the case to police soon.
If proven guilty, Shrestha could face actions like fines and jail term up to three years.
The central bank also decided to ask the NSMF to carry out the due diligence audit (DDA) to ascertain whether or not the bank´s financial health is frail. It has also instructed the NSMF to instantly resume operations and also cash checks of depositors if they preferred to withdraw their savings without any obstacles.
NSMF has closed down its operations since Thursday after the central bank initiated actions against Shrestha.
NRB on Tuesday also asked the Gurkha Development Bank to resume its operations without further delay and pay back the savings of depositors. The bank has remained closed for more than a month, flouting the banking rules.
Going by the rules, no banks and financial institutions can withhold their services without central bank´s permission. However, NRB had turned blind eye to its affair so far.
Source: Republica
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