Lumbini Bikas Bank Issues 21-Day Collateral Auction Notice to Defaulting Borrowers

25th September 2026, Kathmandu

Lumbini Bikas Bank Limited has issued an urgent 21-day public notice instructing listed borrowers to settle their outstanding loan obligations.

Lumbini Bank Collateral Auction

Published in the Annapurna Post national daily on September 25, 2026, the notice warns that the bank will proceed with the public auction of pledged collateral properties if the dues remain unpaid. The recovery action was initiated after borrowers continuously failed to settle overdue principal, interest, penalty charges, and administrative expenses despite prior public notifications and reminders.

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Auction Execution and Bidding Timeline

The development bank is conducting the property liquidation under the authority granted by the Bank and Financial Institutions Act (BAFIA), 2073 BS, and its internal auction guidelines.

• Publication Date: September 25, 2026 (2083/06/09 BS).
• Property Condition: All mortgaged collateral assets will be auctioned on an “as is, where is” basis.
• Bid Submission Window: Interested individuals, corporate entities, and institutions must obtain prescribed forms, complete the documentation, and submit sealed bid tenders within 21 days from the notice publication date.
• Bid Opening Schedule: Sealed bids will be formally opened on the 22nd day following publication at the time and venue specified in the notice. If the opening date coincides with a public holiday, the procedure will take place on the next immediate working day.
• Unilateral Opening Clause: The bid opening and auction proceedings will continue as scheduled regardless of whether the defaulting borrowers, guarantors, property owners, or their representatives are present.

Regulatory Penalties and Debt Recovery Provisions

The bank has detailed secondary legal mechanisms to pursue remaining liabilities should the collateral sale prove insufficient.

• Credit Blacklisting: Defaulting borrowers, company proprietors, corporate directors, and personal guarantors face placement on the Credit Information Center (CIC) blacklist if the loans remain unsettled.
• Deficiency Liability Recovery: If the proceeds from the collateral auction do not fully cover the total outstanding dues, the bank will pursue further legal action to attach and liquidate other personal assets of the borrowers and guarantors in accordance with prevailing laws.
• Settlement Call: Lumbini Bikas Bank has urged all concerned borrowers and guarantors to contact the bank immediately within the 21-day window to clear their liabilities and avert the forced liquidation of their properties.

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