Nepal Bank Takes Decisive Action: Auction Process Initiated Against NGM and Grande Hospital Over Massive Loan Defaults
22nd July 2025, Kathmandu
In a move signaling a tougher stance on loan defaults, Nepal Bank Limited has officially commenced the auction process to recover substantial outstanding loans from two prominent entities, Nepal General Marketing (NGM) and Grande City Clinic & Hospital. Both companies are closely linked to former Assistant Finance Minister, Mr. Rup Jyoti, a well-known figure in Nepal’s business and political landscape. This decisive action by Nepal Bank comes after repeated failures by the debtors to honor their financial obligations and respond to numerous reminders.
Nepal Bank’s Decisive Action
The bank’s Kantipath branch has issued a 35-day public notice, widely disseminated in accordance with the strictures of the Bank and Financial Institution Act and prevailing financial regulations in Nepal. This notice serves as a final ultimatum, announcing the initiation of the loan recovery process through the auctioning of pledged collateral assets if the outstanding dues are not settled within the stipulated period.
The Defaulting Entities: NGM and Grande City Clinic & Hospital
Nepal General Marketing (NGM), a company with significant ties to the influential Jyoti family, is at the forefront of this recovery effort. Ownership of NGM is linked to Rup Jyoti’s son, Abhik Jyoti, and daughter, Suruchi Jyoti, who are listed as shareholders. Crucially, Rup Jyoti himself stands as a loan guarantor for NGM, a designation that places direct personal financial liability on him in the event of the company’s default. This personal guarantee significantly escalates the stakes for the former minister.
The second entity caught in this financial quagmire is Grande City Clinic and Hospital, a prominent healthcare provider in Kathmandu, often referred to as Grande International Hospital. This hospital project is a joint venture backed by NGM, Jaya Spinning Mills, and Syakar Company, the latter also affiliated with the expansive Jyoti Group. These co-investing companies had pooled their resources to fund the healthcare venture but have collectively failed to meet their repayment commitments to Nepal Bank. The interconnectedness of these entities highlights the widespread impact of a single group’s financial distress across various sectors.
Strict Enforcement: Auction and Blacklisting on the Horizon
Nepal Bank’s public notice unequivocally states that if the outstanding dues are not cleared within the 35-day window, the bank will proceed with the confiscation and subsequent auctioning of all pledged collateral assets. These assets could range from land and buildings to machinery and other tangible properties that were mortgaged as security during the original loan disbursement. This is a standard but severe step in Nepal’s loan recovery protocols, designed to ensure that financial institutions can recoup their losses.
Furthermore, Nepal Bank has declared its intention to blacklist Rup Jyoti and all associated companies. Blacklisting in Nepal carries severe repercussions. It effectively bars individuals and entities from accessing any further financial services, including loans from other banks or financial institutions. Moreover, blacklisted parties are typically prohibited from participating in government-related contracts or services, which could have a devastating impact on the future business operations of the Jyoti Group’s various ventures. This measure aims to safeguard the integrity of the financial system and deter future defaults.
Broader Implications for Nepal’s Financial Landscape
This high-profile case has sent ripples through Nepal’s corporate and political sectors. Rup Jyoti’s standing as a prominent businessman and former Assistant Finance Minister means this situation is under intense scrutiny. The public nature of the auction notice and the direct involvement of his family members and their companies represent a significant blow to his long-established public image and credibility.
Moreover, this incident sheds light on the persistent and often controversial issue of corporate loan defaults in Nepal. For years, there have been concerns that well-connected businesses and influential individuals have sometimes received preferential treatment or leniency when it comes to financial compliance. Nepal Bank’s current action, moving aggressively with auction and blacklisting procedures, signifies a potential shift towards stricter enforcement of banking norms and a greater emphasis on financial accountability across the board.
This development is likely to set a crucial precedent for other financial institutions in Nepal. It may embolden them to adopt more stringent measures against high-profile loan defaulters, ensuring that financial discipline is upheld regardless of an individual’s or company’s influence. As the 35-day deadline approaches, all eyes will be on how the Jyoti family and their associated companies respond to this unprecedented challenge. Whether they manage to settle their dues or if the bank proceeds with the auction of their assets, this case will undoubtedly leave a lasting mark on Nepal’s financial regulatory environment and corporate governance practices.
Read More: Nepal Bank’s Decisive Action