KATHMANDU, March 28: Amid rush for withdrawals, the central bank on Sunday assured the depositors of ´troubled´ Gurkha Development Bank (GDB) that their money was safe and that the bank´s financial situation would turn around within the next six months.
The assurance came when GDB depositors met with the Nepal Rastra Bank (NRB) officials after all the branches of the troubled bank closed down after paying some 200 depositors.
The bank paid Rs 30 million on the day. Depositors had withdrawn around Rs 50 million on Friday.
The NRB officials told the depositors that there was no reason to panic as the financial health of the institution was not that bad.
An NRB official told Republica that the deposits of individuals are safe. The bank may not be able to pay all their depositors within a day or two, but there is no chance of people losing their deposits, the official added.
The declaration of the bank as ´troubled´ bank created panic among the depositors, leading to formation of long queues at the bank´s branches across the country.
The official said more than Rs 500 million of the deposit was insured and that the bank currently has liquidity of around Rs 300 million. “Only Rs 5 million of the total loans of Rs 4.5 billion is problematic, Rs 2 billion is good loan and other Rs 2 billion is in very good condition with adequate collateral,” the official added.
As a part of taking action against the board members of GDB, the NRB has decided to freeze bank accounts of all board members and seal their lockers in all BFIs. The central bank is also preparing to take action against executive chairman D B Bamjan, who is facing charge of financial irregularity in a loan deal of Rs 130 million.
Meanwhile, employees of the GDB have appealed to its all debtors to pay back the loan at the earliest. A bank official informed Republica that Krishi Premura Properties has assured them to return advance amount that the bank paid it to purchase land.
In other development, Maoist lawmaker Dharmasheela Chapagain, who allegedly pressed the GDB board to reinstate D B Bamjan as the bank´s executive chairman, said on Sunday that she has nothing to do with that particular case. I had visited the bank on that day, but that has nothing to do with the reinstatement of Bamjan, she added.
http://www.myrepublica.com/portal/index.php?action=news_details&news_id=29677
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