Central bank also takes over Nepal Share Markets and Finance
The central bank has taken over the board and management of troubled Nepal Share Markets and Finance.
The second takeover by the central bank in a week has, though came late, is expected to improve the financial health of the class C financial institutions that has been declared troubled since last two year.
According to the regulation, a financial institution that is declared troubled has to be taken over by the central bank, if it does not improve within six months.
A three member team led by Nepal Rastra Bank deputy director Santosh Kumar Ghimire will take charge of the finance company for six months from Sunday.
Former chairman of Nepal Share Markets and Finance Yogendra Shrestha was arrested on the charge of embezzlement of Rs 2.66 billion by Central Investigation Bureau (CIB) last year as he was found involved in creating fake borrowers and misusing the deposits of the public.
Earlier this week, the central bank has taken over the management of the NCC Bank suspending the board due to prolonged dispute among the board of directors. Likewise, in 2006, the central bank had taken over the Bank of Kathmandu and returned it within three months. However, the central bank has failed to improve the financial health of Gurkha Development Bank and is still managing it, without any solution in near future.