NRB Regulatory Action Nepal: Bank Fines, Loan Classification Issues, Governance Failures
1st May 2025, Kathmandu
Nepal Rastra Bank (NRB) has taken strict action against five commercial banks. The banks broke financial rules during the third quarter of the current fiscal year 2081/82.
NRB Regulatory Action Nepal
The central bank reviewed each case carefully. Then, it decided on fines, warnings, and official instructions to the banks and their CEOs.
Heavy Fine for Standard Chartered Bank
Standard Chartered Bank Nepal faced the biggest penalty. NRB fined the bank Rs. 14.85 crore. The bank failed to meet credit flow requirements. It did not disburse enough loans to the sectors identified by the central bank. This went against NRB’s lending policies.
Nepal Bank Penalized for Misuse of Position
NRB fined Nepal Bank Limited Rs. 5 lakh. This action followed misconduct by its former Board Chairperson, Dr. Chandra Bahadur Adhikari. He misused his official title for personal benefit. NRB said this broke its unified directive that governs board behavior.
Warning Issued to Rastriya Banijya Bank
Rastriya Banijya Bank (RBBL) received a formal warning. The bank did not properly categorize some loans. It also failed to set aside enough funds for possible loan losses. In addition, it ignored parts of the Capital Adequacy Framework 2015 and mismanaged working capital loans.
NRB warned the CEO of RBBL and asked for better internal controls.
Kumari Bank Found Negligent in Loan Management
NRB also warned the CEO of Kumari Bank. The bank had not properly classified bad loans. It also failed to maintain the minimum required loan loss provision. These errors went against risk management guidelines. The central bank ordered the bank to fix the problems immediately.
Multiple Issues at Laxmi Sunrise Bank
Laxmi Sunrise Bank Limited had several rule violations. The bank allowed a founder to maintain a negative balance in a current account. This is not allowed under NRB’s rules.
Moreover, the bank:
Gave long-term loans as working capital credit.
Issued term loans disguised as margin loans.
Allowed backloaded repayment schedules, with small payments early and large ones later.
Approved loan policies at the CEO level without board approval.
One founder, who held more than 2% of the bank’s shares, also used his promoter shares as collateral at another bank. He did this without informing Laxmi Sunrise Bank. The bank also failed to keep records of the transaction. NRB considered this a serious governance failure.
NRB Reinforces Discipline
NRB said these actions promote better discipline in the banking sector. It wants banks to follow rules, manage risk properly, and avoid misuse of authority.
The central bank has sent a strong message. Every bank must follow its policies strictly. If not, there will be consequences.
For more: NRB Regulatory Action Nepal
