Aug 07, Kathmandu - The Nepal Rastra Bank has taken disciplinary measures against ‘A’ class commercial banks and their officials for violations of regulatory directives during the fourth quarter of the fiscal year 2082/83.

According to the Bank Supervision Department of Nepal Rastra Bank, actions have been taken against Nepal Bank, Agricultural Development Bank, and Prabhu Bank for various breaches, ranging from warnings to cash fines.

The most severe penalty was imposed on Ashok Sherchan, then CEO of Prabhu Bank Limited. Sherchan was fined NPR 500,000 in cash under Section 100(2)(g) of the Nepal Rastra Bank Act, 2058. The bank's violations included repeated breaches of central bank directives, failure to classify loans properly, maintaining inadequate loan loss provisions, and submitting data to the bank that differed from core banking system reports, the central bank stated.

Additionally, the bank’s Board of Directors was instructed to address serious weaknesses and undertake corrective measures through a formal agreement, as the bank showed reluctance to improve issues highlighted in previous inspection reports.

State-owned major banks, Nepal Bank and Agricultural Development Bank, also faced sanctions. Nepal Bank was warned for non-compliance with the “Bank Account Blocking and Unblocking Regulations, 2081,” by failing to freeze accounts timely, violating Section 100(1)(a) of the Nepal Rastra Bank Act, 2058.

Similarly, Agricultural Development Bank Limited was cautioned for not timely blocking accounts during special onsite inspections and neglecting to follow prescribed regulations, as per requests from the central bank and law enforcement agencies.

Nepal Rastra Bank continues to enforce such measures to promote good governance within banks and financial institutions and ensure effective compliance with regulatory standards.