Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) has taken stern action against Prabhu Bank Limited for making serious errors in the credit details, repeatedly violating regulatory directives and discrepancies in the details of the core banking system submitted to the Nepal Rastra Bank.
According to the Bank Supervision Department, the Board of Directors of the bank has been directed to prepare a reform plan and implement it immediately after the serious weaknesses seen in the overall on-site inspection report were not rectified on time.
The Nepal Rastra Bank (NRB) has accused Prabhu Bank of making mistakes in loan classification, not maintaining adequate credit loss provisions and violating various regulatory provisions including the Integrated Directive, 2081 BS.
The inspection also revealed that there was a discrepancy between the loan details submitted to the NRB and the details received from the bank’s core banking system.
According to the NRB, the then Chief Executive Officer (CEO) of Prabhu Bank, Ashok Sherchan, has been fined Rs 500,000 in cash as per the sub-section (2)(c) of Section 100 of the Nepal Rastra Bank Act, 2058.
Nepal Rastra Bank (NRB) has directed the banks to immediately implement necessary reforms to ensure effective internal control, credit risk management and full compliance of regulatory directives.
