NRB Prepares for Bad Loan Provisioning in Connection to Lalita Niwas Scam

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NRB Prepares for Bad Loan Provisioning in Connection to Lalita Niwas Scam

February 14: Nepal Rastra Bank is preparing to instruct the concerned banks for bad loan provisioning for the money they provided by keeping the land of Lalita Niwas as collateral.

Looking at the status of loan and preliminary evaluation, the loan in this case requires provisioning, said a high ranking official at the central bank. The bank has started discussion regarding this issue, the official said requesting anonymity.

The Commission for the Investigation of Abuse of Authority (CIAA) has filed corruption cases against 175 individuals including former ministers for their alleged involvement in transferring 114 ropanis of government land at Baluwatar in the name of individuals.

Investigations by the anti-graft body has revealed that various individuals have taken loans worth Rs 2.41 billion from different banks and financial institutions by keeping the forged land ownership certificate of Lalita Niwas as collateral.

The central bank had earlier suggested the concerned BFIs to adopt legal remedies to ensure that the deposits of the customers get protected. The NRB last week sought the details of the loans provided by the BFIs by keeping the Lalita Niwas land as collateral. The BFIs have already provided the details to the central bank.

More than 20 BFIs, some of those who have already merged, had provided loan in this case. Source at the central bank said that 12 of the banks and financial institutions who provided the loans are yet to recover them.

The latest move of CIAA clearly indicates that the transaction involving Lalita Niwas land is illegal and there are high chances that the land will be nationalized. This has posed risk to the loan amount provided by keeping the land ownership certificate of the disputed land as collateral.

In such circumstances, the NRB officials argue that the BFIs have no other options than bad loan provisioning.

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