Kathmandu: Nepal Rastra Bank (NRB) has imposed disciplinary measures on 28 banks and financial institutions for failing to comply with regulatory guidelines during the fiscal year 2024/25.
The central bank has issued fines, warnings, and suspensions to enforce financial discipline and ensure stability in the banking sector.
The NRB maintains strict oversight of commercial banks, development banks, and finance companies to uphold transparency and regulatory compliance. Violations include ignoring directives, delayed reporting, risky lending practices, failure to maintain mandatory reserves, unauthorized internal decisions, and interest rate manipulations. Institutions found guilty of repeated or severe breaches face penalties such as fines, branch expansion bans, executive suspensions, and formal warnings.
In the first quarter of the fiscal year, NRB took action against several banks. Nepal Investment Mega Bank was warned for negligence in account opening procedures, while Prabhu Bank faced penalties for non-compliance with locker regulations. Miteri, Sindhu, and Salpa Development Banks were penalized for exceeding interest rate caps and failing to submit financial reports on time, resulting in branch expansion freezes and corrective orders.
The second quarter saw stricter enforcement, with Prabhu Bank, Himalayan Bank, and NIC Asia Bank facing penalties for governance lapses, improper loan classifications, and preferential treatment in lending to directors’ relatives. Karnali Development Bank was declared “problematic” after failing to repay depositors, prompting NRB to take direct control. Meanwhile, Pokhara Finance and Central Finance were fined for failing to maintain required cash reserves.
During the third quarter, major banks such as Rastriya Banijya Bank, Kumari Bank, Laxmi Sunrise Bank, Nepal Bank, and Standard Chartered Bank came under scrutiny. Standard Chartered was fined a staggering Rs 14.85 crore for under-lending in priority sectors. Development banks like Muktinath, Narayani, and Salpa were also penalized for governance failures and capital shortfalls. Finance companies, including Pokhara Finance (fined three times in a single quarter), Janaki Finance, and Gorkhas’ Finance, faced penalties for liquidity breaches and leadership deficiencies.
In the fourth quarter, repeat offenders like Citizens Bank and NIC Asia Bank were warned for loan mismanagement and excessive interest charges. Guheshwori Merchant Banking & Finance faced penalties four times for delayed reporting, irregular loan recovery, and unauthorized staff benefits. Pokhara Finance, penalized five times in a year, was fined Rs 32.77 lakh for failing to maintain mandatory reserves.
NRB has issued a stern warning to all penalized institutions to rectify their lapses immediately, emphasizing that further violations will result in even stricter actions. The central bank remains committed to ensuring financial stability and public trust through rigorous regulatory oversight.
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