NRB Takes Action Against Six Microfinance Institutions for Regulatory Breaches

Kathmandu — Nepal Rastra Bank (NRB) has taken regulatory action against six microfinance institutions for failing to maintain the mandatory minimum capital adequacy ratio and Cash Reserve Ratio (CRR). The central bank's Microfinance Institution Supervision Department penalized these institutions based on their fourth-quarter financial reports for the fiscal year 2082/83.

As per NRB directives, microfinance institutions must maintain a minimum capital fund of 8 percent. However, four companies—Forward, Dhaulagiri, Matrubhumi, and NIC Microfinance—failed to meet this threshold and have been subjected to 'Prompt Corrective Action' (PCA). According to the central bank's data, the capital adequacy ratio stood at 6.12 percent for Forward, 6.38 percent for Dhaulagiri, 4.08 percent for Matrubhumi, and 6.39 percent for NIC. All four institutions were penalized under Bylaw 3(b) of the Prompt Corrective Action Bylaw, 2017 (2074 BS).

Similarly, the central bank imposed cash fines on two other microfinance companies for failing to maintain their mandatory Cash Reserve Ratio. Win Nepal Laghubitta was fined Rs 58.38 for failing to meet the CRR requirement in the month of Chaitra, 2082. Meanwhile, Sanjeevani Laghubitta faced consecutive fines for failing to maintain its cash reserves for four straight months. NRB slapped fines of Rs 713.88 for Chaitra, Rs 1,067.40 for Baisakh, Rs 1,412.91 for Jestha, and Rs 1,410.78 for Asadh on Sanjeevani Laghubitta.