Only one company has submitted a proposal to the Nepal Rastra Bank (NRB) to conduct the audit of large commercial banks to examine their credit quality, which the International Monetary Fund (IMF) demanded last year.
Five companies, which passed the initial selection, were asked to submit proposals around five months ago, said Dr Dilliram Pokharel, Deputy Spokesperson at the NRB. However, only the India-based KPMG Assurance and Consulting Services has submitted a proposal so far.
The Public Procurement Act, 2063, allows for the acceptance of a bid even if only one company has submitted it.
Section 26 (2) of the Act says: “Notwithstanding anything contained in Sub-section (1), no bid shall be rejected or re-bidding shall be invited only for the reason that only a few bids are or only one bid is substantively responsive.”
In line with the provision, NRB has scheduled to open the financial proposal submitted by KPMG for September 1.
The KPMG might get the responsibility of carrying out the audits as it is the company which has already proven its technical qualification to NRB, according to Pokharel.
The International Monetary Fund (IMF) has raised questions on the rising Non Performing Loans (NPLs) of Nepali banks.
The global financial agency put a condition last year of carrying out the audit of 10 big commercial banks to examine their credit quality before approving an installment under the Extended Credit Facility (ECF), suspecting evergreening of loans.
The agreement with the IMF stipulates that the audit process shall begin at the end of April 2024 and be completed by December this year, in order to start the improvement action plan from February next year.
However, the work will not be completed on time due to the delay in selection of the auditor.
Initially, NRB had selected Deloitte Financial Advisory from the Netherlands, KPMG Assurance and Consulting Services from India, and KPMG Taseer Hadi & Company from Pakistan around five months ago.
Additionally, NRB had also shortlisted a joint venture between India's PricewaterhouseCoopers and Nepal's CSC & Company (Chartered Accountants), and India-based SR Batliboi & Associate LLP and Nepal's BK Aggarwal & Company (Chartered Accountants).
The central bank had initially given the shortlisted companies a July 6 deadline to submit proposals.
But, the deadline was extended twice, until August 5, after none of the companies submitted any proposal by the original deadline.
