Nepal Rastra Bank has taken action against six microfinance institutions for failing to meet required regulatory standards in the fourth quarter of fiscal year 2082/83.
Central bank of Nepal, Nepal Rastra Bank, has taken action against six ‘D’ class microfinance financial institutions and their officials during the fourth quarter of fiscal year 2082/83. According to details released by Microfinance Institution Supervision Department of NRB, four microfinance were placed under prompt corrective action for failing to maintain minimum capital adequacy ratio, while two institutions was fined in cash.
Microfinance Institutions Facing Prompt Corrective Action
According to central bank, Forward Microfinance Financial Institution Limited located in Sunsari maintained a minimum capital adequacy ratio of only 6.12 percent at end of Ashad 2082. Because it failed to meet regulatory requirement, NRB initiated prompt corrective action on Baisakh 8, 2083 under Regulation 3(a) of bylaws relating to prompt corrective action for financial institutions.
Similarly, Dhaulagiri Microfinance Financial Institution Limited in Baglung maintained only 6.38 percent capital adequacy ratio at the end of Ashad 2082. Central bank took prompt corrective action on this company on Baisakh 10, 2083 under Regulation 3(a).
Another institution, Mathrubhumi Microfinance Financial Institution Limited located at Budhanilkantha, Kathmandu, recorded capital adequacy ratio of just 4.08 percent at end of Ashad 2082. After failing to fulfill regulatory requirement, central bank placed the company under prompt corrective action under Regulation 3(b) on Baisakh 29, 2083.
Likewise, NIC Microfinance Financial Institution Limited in Banepa maintained only 6.39 percent capital adequacy ratio at end of Ashad 2082. Due to this issue, NRB took prompt corrective action against it on Ashadh 12, 2083 under Regulation 3(a).
Fines Imposed for Not Maintaining Cash Reserve
On the other hand, two microfinance companies were penalized for fail to maintaining mandatory cash reserves. Wean Nepal Microfinance Financial Institution Limited in Banepa, Kavrepalanchok, was fined Rs. 58/38 for first time after failing to maintain mandatory cash reserve in Chaitra 2082. NRB stated this action was taken on Ashadh 23, 2083.
In addition, Sanjeevani Microfinance Financial Institution Limited in Tulsipur, Dang, faced cash fines in different phases for not maintaining mandatory cash reserves. As per NRB report, institution failed to keep mandatory cash reserve in Chaitra 2082 as well as Baisakh, Jestha, and Ashadh 2083, leading to cash penalties.
AI Disclaimer: This article was originally published on https://bajarkochirfar.com. It has been translated with the help of AI. For the best understanding and accurate facts, we recommend reading the original Nepali version.
