Nepal Rastra Bank has taken over the management of NCC Bank

February 4, 2014
Central bank of Nepal, The Nepal Rastra Bank (NRB) has taken over the management of Nepal Credit and Commerce (NCC) Bank. NRB on Tuesday (February 4th 2014) dissolved the NCC board of director as the NRB’s efforts to settle down the dispute between two promoter groups went vain and handed it over to a three- member of management led by NRB Director Laxmi Prapanna Niraula after expiry of the deadline given by NRB to resolve the internal dispute among the board members. The other management team, including NRB Deputy Director Ramesh Acharya and Assistant Director Resham Raj Regmi, has been authorized to use the rights of the board of directors. The existing management team will continue to work under NRB team. The daily operation of the bank has been severely affected by the dispute between the two factions. NRB officials said it had to intervene as two factions could not be brought into a harmony despite maximum efforts from its part. They said the two factions were registering complaints against each other at various authorities, including the NRB and Commission for Investigation of Abuse of Authority (CIAA). However, both factions had agreed to settle down their disputes through a special general meeting. The establishment faction (NB Group) wanted all the board of directors to be elected by the special general meeting, but their counterpart faction disagreed as two of three public directors Ved Man Singh Malla were associated with NB Group and two others directors, Ashok Samsher Rana and Hari Prasad Bharrarai, are associated with the Pradhan Group.

Banks increasing spread rate instead of decreasing

February 19, 2014
Commercial Banks has increased their spread rate again to 6.85 percent in the sixth month of the current fiscal year; it was 6.73 percent last month. Central bank of Nepal, The Nepal Rastra Bank (NRB) has directed the banks to make preparations to limit the spread rate to 5 percent from the next fiscal year. Such difference between the interest rates paid by banks on deposits and charged on loans was 6.97 percent at the start of the current fiscal year. Commercial banks have surplus liquidity of over Rs 70 billion as loan mobilization did not increase in proportion to the collected deposits from the beginning of the current fiscal year.  The banks reduced the interest rate on deposits owing problems in expanding loan mobilization but they do not review the interest rate for loans. The spread rate of the commercial bank is 6.85 percent as the average interest rate on deposit is now 4.68 percent, whereas the interest rate charged on loan is 11.53 percent.