Kathmandu, Aug. 2: Nepal Rastra Bank (NRB) has taken regulatory action against three commercial banks for violating supervisory directives, issuing warnings to Rastriya Banijya Bank and Agricultural Development Bank while imposing a Rs. 500,000 fine on former Prabhu Bank Chief Executive Officer Ashok Sherchan.
According to the central bank, Rastriya Banijya Bank was formally warned after it failed to freeze a bank account in a timely manner, violating provisions of the Bank Account Freeze and Release Regulation, 2024. The action was taken under Section 100(1)(a) of the Nepal Rastra Bank Act, 2002 as a first-time warning.
Agricultural Development Bank was also issued a warning after inspectors found that it had failed to freeze bank accounts promptly as required under the Bank Account Freeze and Release Regulation, 2024, including its first amendment. The NRB directed the bank to immediately implement account freeze and release requests upon receiving them in the future.
Prabhu Bank faced stricter action after the central bank found that serious deficiencies identified during on-site inspections had not been corrected despite repeated directives.
The NRB said it had earlier instructed the bank to address shortcomings highlighted in its 2024 inspection report. However, a risk-based inspection conducted in 2025 found that most of those weaknesses remained unresolved. As a result, the central bank required Prabhu Bank’s board of directors to sign a written commitment to implement corrective measures under Section 100(1)(b) of the Nepal Rastra Bank Act.
The central bank also fined former Prabhu Bank CEO Ashok Sherchan Rs. 500,000 under Section 100(2)(g) of the Act.
According to the NRB, Sherchan failed to comply with directives on loan classification, did not maintain adequate loan loss provisions, failed to rectify most of the deficiencies identified during regulatory inspections, and submitted loan reports that did not match data recorded in the bank’s core banking system. These violations led to the monetary penalty, the central bank said.
People’s News Monitoring Service
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