Banking News – Nepal Rastra Bank has taken action against six microfinance financial institutions in the fourth quarter of the fiscal year 2082/83. The Microfinance Institution Supervision Department of the central bank took action against six institutions.

Those facing action from the central bank include Forward Microfinance, Dhaulagiri Microfinance, Matribhumi Microfinance, NIC Asia Microfinance, Wean Nepal Microfinance, and Sanjeevani Microfinance. Forward Microfinance maintained a minimum capital fund ratio of only 6.12 percent as of mid-Asar 2082, and since that ratio was not in accordance with regulatory standards, prompt corrective action was taken against the institution as per Regulation 3 (a) of the Prompt Corrective Action Relating to Banks and Financial Institutions Regulations, 2074.

Nepal Rastra Bank took prompt corrective action against Dhaulagiri Microfinance Financial Institution as per Regulation 3 (a) of the Prompt Corrective Action Relating to Banks and Financial Institutions Regulations, 2074, since the institution maintained a minimum capital fund ratio of only 6.38 percent as of mid-Asar 2082, which was not in accordance with regulatory standards.

Since Matribhumi Microfinance maintained a minimum capital fund ratio of only 4.08 percent, which was not in accordance with regulatory standards, prompt corrective action was taken against the institution as per the Prompt Corrective Action Relating to Banks and Financial Institutions Regulations, 2074. Similarly, the central bank took prompt corrective action against NIC Asia Microfinance as per the Prompt Corrective Action Relating to Banks and Financial Institutions Regulations, 2074, since the institution maintained a minimum capital fund ratio of only 6.39 percent as of mid-Asar, which was not in accordance with regulatory standards.

Nepal Rastra Bank has also imposed fines on two microfinance institutions. The central bank imposed a cash fine of Rs 58 on Wean Nepal Microfinance for the first time for failing to maintain mandatory cash reserves. Similarly, Sanjeevani Microfinance was fined cash amounts of Rs 713, Rs 1,067, Rs 1,412, and Rs 1,410 for the first, second, third, and fourth instances respectively for failing to maintain mandatory cash reserves in the months of Baisakh, Jestha, and Asar.