Nepal Rastra Bank (NRB) has taken action against several development banks and finance companies for breaching regulatory provisions.

Among them, Muktinath Bikas Bank’s Chairman and Chief Executive Officer have been alerted by the central bank for misusing funds designated for customer protection.

The NRB disclosed that funds allocated for the customer protection fund, generated from fees collected from customers with poor-class loans, were diverted for other purposes by Muktinath Bikas Bank. The bank has reimbursed the misappropriated funds.

The Board of Directors and CEO of Saptakoshi Development Bank received a warning from the NRB for allowing an independent director to persist in board meetings and engage in decision-making processes beyond their term. Moreover, the CEO of Saptakoshi Development Bank allegedly tampered with the base rate through unauthorized access to the core banking system.

Narayani Development Bank incurred fines totaling Rs 12,846 for failing to maintain mandatory balances as per regulatory standards. The bank also faced an additional penalty of Rs 242,000 for increasing the CD ratio by 90 percent during the Nepali months of Shrawan and Bhadra.

Progressive Finance’s CEO and board of directors were issued warnings by the NRB for granting risky loans by employing a non-current mortgage evaluation process.

Similarly, Goodwill Finance came under scrutiny for extending loans to Maharjan Business Associates Pvt Ltd without conducting adequate project analysis and ensuring proper utilization of the loan amount. As a result, the NRB instructed the board of directors and executive head of Goodwill Finance accordingly.

Guhyeshwari Merchant Banking and Finance were found to have breached NRB’s regulatory provisions by exceeding the prescribed limit for selling investment shares in the fiscal year 2022/23.