NRB tightens balance certificates issuance
KATHMANDU:
Nepal Rastra Bank (NRB) has asked the banks and financial institutions to stop issuance of bank balance certificates to non account holders. “The newspapers’ classifieds are strewn with the advertisement of providing bank balance certificates at certain charge which is illegal but is happening which needs to be stopped,” said spokesperson for Nepal Rastra Bank Bhaskar Mani Gyanwali.
Issuing bank balance certificate to non account holders for a short time to meet the visa or tender requirements has become a lucrative business for some of the financial institutions in the recent times.
Some people are earning chunks of money by issuing balance certificates for short time and charging the beneficiary for doing so. The move today comes in a bid to rein in the possibility of general public being cheated by some unscrupulous person or institutions. “Few such cases have been reported to central bank,” he informed.
The circular has also provided little respite to the banks and financial institutions that are struggling to meet the revised 0.5 percentage point of deprived sector lending requirement. The commercial banks have to lend 3.5 per cent of their total loans to deprived sector while development banks and finance companies’ loan portfolio should contain three per cent and 2.5 per cent loans issued to deprived sector, according to monetary policy.
The NRB has allowed the banks and financial institutions to increase depri-ved sector lending by 0.25 percentage point by first half of current fiscal year and subsequently meet the requirement by the end of current fiscal year. “They needed to increase loans floated to deprived sector by next month but they have time to adjust.”
The directive has also asked the professional directors and their family members of BFIs that hold shares in the institution to transfer it within a year.
Source: THT
Nepal Rastra Bank (NRB) has asked the banks and financial institutions to stop issuance of bank balance certificates to non account holders. “The newspapers’ classifieds are strewn with the advertisement of providing bank balance certificates at certain charge which is illegal but is happening which needs to be stopped,” said spokesperson for Nepal Rastra Bank Bhaskar Mani Gyanwali.
Issuing bank balance certificate to non account holders for a short time to meet the visa or tender requirements has become a lucrative business for some of the financial institutions in the recent times.
Some people are earning chunks of money by issuing balance certificates for short time and charging the beneficiary for doing so. The move today comes in a bid to rein in the possibility of general public being cheated by some unscrupulous person or institutions. “Few such cases have been reported to central bank,” he informed.
The circular has also provided little respite to the banks and financial institutions that are struggling to meet the revised 0.5 percentage point of deprived sector lending requirement. The commercial banks have to lend 3.5 per cent of their total loans to deprived sector while development banks and finance companies’ loan portfolio should contain three per cent and 2.5 per cent loans issued to deprived sector, according to monetary policy.
The NRB has allowed the banks and financial institutions to increase depri-ved sector lending by 0.25 percentage point by first half of current fiscal year and subsequently meet the requirement by the end of current fiscal year. “They needed to increase loans floated to deprived sector by next month but they have time to adjust.”
The directive has also asked the professional directors and their family members of BFIs that hold shares in the institution to transfer it within a year.
Source: THT
