NRB takes measures against three commercial banks for breaching regulatory protocols

KATHMANDU: Nepal Rastra Bank (NRB) has responded decisively to regulatory violations by three commercial banks. NRB officials have confirmed that punitive actions have been taken against these banks, which were found to have disregarded regulatory protocols during the fourth quarter of the fiscal year 2022/23.

Kumari Bank and Himalayan Bank have incurred monetary penalties due to their failure to maintain the mandated 90 percent credit-to-deposit ratio (CD ratio) as stipulated by NRB guidelines.

Kumari Bank faced a cash penalty of NPR 5.96 million for its non-compliance with the CD ratio requirement in January of the previous fiscal year.

Similarly, Himalayan Bank was levied a cash penalty of NPR 13.9 million for falling short of the CD ratio benchmark in October of the preceding fiscal year.

Conversely, NRB has issued a warning to Prime Commercial Bank. The regulatory authorities at NRB have identified instances of non-compliance with the loan loss provisions outlined in Instruction Number 2 of the Unified Directives 2079 BS, issued by NRB.

Furthermore, as per the ‘Capital Adequacy Framework 2015’, Prime Bank’s calculation of risk-weighted assets was found to deviate from actual values, a discrepancy noted by NRB.

Similarly, the CEO of Prime Commercial Bank has been cautioned for imposing interest charges by increasing premium rates, a violation of Section 100 of the Unified Directives 2079 BS.