The Nepal Rastra Bank (NRB) has implemented regulatory measures against Saptakoshi Development Bank and Lumbini Bikas Bank following the recent inspection findings for the first quarter of the ongoing fiscal year. Saptakoshi has been subjected to prompt corrective action due to its inability to meet the necessary Capital Adequacy Ratio (CAR), while Lumbini’s board has been warned for amending the CEO’s service provisions in breach of regulatory requirements.
The central bank assessed that Saptakoshi’s CAR was at 7.51% at the close of Ashad in the year 2082, which is 24.9% beneath the obligatory 10% minimum. Even after adjustments for loan loss reserves, the bank’s capital ratio has remained deficient in the preceding fiscal year as well. NRB’s findings also highlighted problems such as extending loan terms without adequate documentation, questionable loan loss information, and noncompliance with reporting standards. Consequently, CEO Dinesh Kumar Pokharel has received an official warning, and the board of directors has been directed to enhance internal governance.
In Lumbini Bikas Bank’s case, NRB identified that the board had augmented the CEO’s benefits shortly after his reappointment for a subsequent term, violating regulatory standards. Thus, the central bank issued a warning notice to the previous board members, instructing them to avert such non-compliance in the future and to promote transparency in decisions regarding executive compensation.
