KATHMANDU: Nepal Rastra Bank (NRB) has taken disciplinary action against three Class ‘A’ commercial banks and their officials for violating regulatory directives during the fourth quarter of fiscal year 2025/26.
According to details released by the NRB’s Bank Supervision Department, Rastriya Banijya Bank, Agricultural Development Bank and Prabhu Bank faced actions ranging from warnings to monetary penalties for various regulatory breaches.
The most severe action was taken against former Chief Executive Officer (CEO) of Prabhu Bank Limited, Ashok Sherchan, who was fined Rs 500,000 under Section 100 (2)(c) of the Nepal Rastra Bank Act.
The central bank said Sherchan was penalised for repeatedly violating directives issued by NRB, failing to maintain adequate loan loss provisions due to improper loan classification, and submitting information to the central bank that differed from data generated by the bank’s core banking system.
NRB also directed Prabhu Bank’s board of directors to address serious shortcomings and required the bank to submit a commitment letter outlining corrective measures. The action was taken after the bank failed to show adequate progress in resolving issues identified in previous inspection reports.
Two government-owned commercial banks also faced NRB action.
Rastriya Banijya Bank was issued a warning for failing to freeze bank accounts on time as required under the Bank Account Blocking and Release Regulations, 2025, violating provisions under Section 100 (1)(a) of the Nepal Rastra Bank Act.
Similarly, Agricultural Development Bank was also warned after a special on-site inspection found that it had failed to freeze accounts within the required timeframe despite requests from NRB and law enforcement agencies, and had not fully complied with regulatory provisions.
Nepal Rastra Bank said such actions are part of its efforts to strengthen corporate governance in banks and financial institutions and ensure effective compliance with regulatory requirements.
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