Nepal Rastra Bank (NRB) has requested the government to freeze property of board members and executive chairman of People´s Finance Limited (PFL) that were found involved in banking crime.
"We have already written to the Ministry of Finance (MoF) to instruct the concerned authority to freeze property of PFL´s top brass, including executive chairman Chhabilal Bhusal," said an NRB source.
The central bank has also requested the MoF to seize their passports to prevent them from leaving the country.
NRB tightened grip against Bhusal and top PFL officials, including former CEO Tanka Mani Bhusal, after its special inspection found them guilty in embezzlement of well over Rs 450 million.
Even though the existing Bank and Financial Institution Act (BAFIA) restricts promoters from taking loans from institutions promoted by them, the inspection team had found Bhusal of taking loans from the company by creating fake borrowers.
Majority of loans taken indirectly by Bhusal were real estate loans. As he failed to recoup the investment amid realty slump, it eventually sparked liquidity crunch in the company.
As a result, PFL had suddenly shut down operations on June 7 and its top brass, including Bhusal, went out of contact.
The company under the efforts of Keshav Prasad Bhattarai, deputy chief executive, resumed operations on June 9, but it has not yet managed to repay depositors the full amount.
Records show that the company´s deposits stands at about Rs 890 million, while its loans and advances stand at Rs 1.04 billion. Of the total credit, more than Rs 800 million has gone into real estate and housing.
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