At a recent board briefing, Nepal Rastra Bank officials explained that a large amount of Prabhu Bank’s money had been used without paying interest. They said the case is mainly connected to Prabhu Management, and the Central Investigation Bureau must be supported fully in its investigation.
The Rastra Bank board held back-to-back meetings from the morning to review the latest developments in the banking sector. After completing the first quarter review of monetary policy, the board met again in the evening and received detailed updates from the regulation and supervision departments.
During the briefing, officials clarified that the misuse of funds happened under Prabhu Management. Money had been moved around without interest and without following proper rules. They told the board that cooperating with CIB is necessary to complete the investigation properly.
A board member said that anyone who used the bank’s money without paying interest would now have to return that interest. He added that Rastra Bank would help government bodies with whatever documents or support they need.
Some board members noted that Prabhu Bank had faced serious internal issues in the past. They said the central bank had repeatedly tried to guide its leadership and fix problems step by step. According to one board member, earlier conditions inside the bank were even more chaotic than today.
The board also asked about Prabhu Bank’s financial health. Regulation officials said the bank’s liquidity ratio, CD ratio and other key indicators were still at acceptable levels. They assured the board that the bank is not close to collapse and that depositors do not face any risk.
A few board members also expressed concern that Governor Biswo Paudel had not coordinated strongly enough with other government agencies when banks and financial institutions faced legal or operational difficulties. They said better cooperation is needed so that banks do not get stuck in long administrative problems.
