Kathmandu, May 14: Nepal Investment Mega Bank (NIMB) has clarified that its loan recovery and collateral auction process was carried out in accordance with prevailing laws.
The bank issued a statement after the Central Investigation Bureau (CIB) arrested its Chief Executive Officer (CEO), Jyoti Prakash Pandey, on Tuesday night for investigation purposes, stating that the loan recovery process had been conducted lawfully.
In its press release, the bank claimed that all procedures were undertaken in compliance with the Bank and Financial Institutions Act, the Secured Transactions Act, and the loan recovery guidelines.
According to the CIB, the bank appears to have sold through auction assets that had already come under the control of the Nepal Telecommunications Authority. Likewise, although the auction notice had stated that nearly NPR 400 million had been allocated for house rent and electricity dues, the CIB alleges that the concerned landlords had not received the payments. Based on this issue, an investigation has been launched against CEO Pandey on charges related to fraud and criminal breach of trust.
However, the bank has rejected these allegations, stating that NPR 380 million is still being held securely. According to the bank, equipment and materials related to Smart Telecom were auctioned on Asoj 3, 2082, generating a total of NPR 4.60 billion.
Out of this amount, NPR 4.22 billion was used to repay loans disbursed under co-financing arrangements, according to the bank. The remaining NPR 380 million has been frozen in an “Earnest Money Auction Account,” and the bank clarified that payments will be made gradually to the concerned landlords after receiving the necessary documentation.
The detention of CEO Pandey has created ripples within the banking sector as well. In recent years, as regulatory scrutiny has increased over large loans, collateral management, and asset management processes of distressed companies, this case has sparked debate over the boundary between banks’ legal rights and the control exercised by government agencies.
Nevertheless, the bank stated that it is fully cooperating with the ongoing legal investigation. It mentioned that all necessary documents, details, and support required for the investigation have been provided to the concerned authorities in a timely manner, and expressed commitment through its press release to continue extending cooperation in the future.
The bank also asserted that there would be no negative impact on its daily operations, financial governance, depositors’ interests, shareholders’ confidence, or customer services, and urged all stakeholders to remain assured. NIMB also expressed gratitude to Nepal Rastra Bank, depositors, customers, and shareholders for their trust and support.
People’s News Monitoring Service.
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