NRB Takes Action Against 6 Microfinance Institutions for Regulatory Violations, Citing Capital and Cash Reserve Breaches
Nepal Rastra Bank has penalized six microfinance financial institutions for violating regulatory provisions in the fourth quarter of fiscal year 2082/83. Four were penalized for failing to maintain minimum capital adequacy ratio, while two were fined for not maintaining mandatory cash reserves.
Kathmandu. Nepal Rastra Bank has taken action against six microfinance financial institutions for violating regulations. The Microfinance Institution Supervision Department of the central bank took action against them for breaching regulatory provisions in the fourth quarter of fiscal year 2082/83.
The institutions facing action include Forward Microfinance, Dhaulagiri Microfinance, Matribhumi Microfinance, NIC Microfinance, Win Nepal Microfinance, and Sanjeevani Microfinance Financial Institution.
Among them, four microfinance institutions were penalized for failing to maintain the minimum capital adequacy ratio, while two were penalized for not maintaining mandatory cash reserves.
According to Nepal Rastra Bank's provisions, the minimum capital adequacy ratio must be 8 percent. However, Forward Microfinance has 6.12 percent, Dhaulagiri Microfinance has 6.38 percent, Matribhumi Microfinance has 4.08 percent, and NIC has 6.39 percent. These microfinance institutions have been subjected to prompt corrective action under Regulation 3(b) of the Prompt Corrective Action Regulations, 2074.
Similarly, Nepal Rastra Bank has imposed cash fines on Win Nepal Microfinance of 58.38 rupees for failing to maintain mandatory cash reserves in Chaitra 2082, and on Sanjeevani Microfinance for failing to maintain mandatory cash reserves in Chaitra 2082, Baisakh, Jestha, and Ashad 2083, with fines of 713.88 rupees, 1067.40 rupees, 1412.91 rupees, and 1410.78 rupees, respectively.