KATHMANDU: Karnali Development Bank has been declared a troubled institution by Nepal Rastra Bank (NRB).
In a meeting held on Wednesday, the NRB board decided to declare the bank problematic under Section 86(b) of the Nepal Rastra Bank Act, 2058. Following the declaration, NRB has taken control of the bank’s management.
A three-member management team has been formed, led by NRB Deputy Director Tikaram Khatri. This team will assume its responsibilities starting Thursday.
The team will focus on returning depositors’ savings, recovering loans, and investigating financial irregularities to initiate legal action, NRB stated.
The bank was declared problematic due to its failure to maintain the minimum capital fund ratio, weak institutional governance, and suspected financial mismanagement.
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