BFIs told to keep close watch on bank lockersThe Nepal Rastra Bank (NRB) has asked the banks and financial institutions (BFIs) to keep a close eye on the bank lockers of the politically exposed persons (PEPs).
The Nepal Rastra Bank (NRB) has asked the banks and financial institutions (BFIs) to keep a close eye on the bank lockers of the politically exposed persons (PEPs).
The central bank on Monday directed the BFIs to categorise their locker users under four categories—customers with high risk, medium risk, and low risk and politically exposed person (PEP)—by amending its unified directives and monitor them accordingly.
Discovery of ammunitions at the bank locker of suspended CPN (Maoist Centre) lawmaker Lharkyal Lama at the Durbarmarg branch of Nepal Investment Bank about four months ago prompted the central bank to make such a provision, according to NRB officials.
Fourteen rounds of ammunition were found during a raid by the Commission for Investigation of Abuse of Authority (CIAA) on Lama’s bank locker. “Lharkyal incident had raised some serious questions about the risk associated with locker services,” said a senior official at the NRB. “Through this directive, we have tried to address the issue.”
The BFIs are now required to monitor the activities of their customers who fall under the PEP category with enhanced due diligence, the official added.
The President, Vice President, ministers, lawmakers, officials of constitutional bodies, bureaucrats holding secretary-level and higher posts, judges of appellate and higher courts, central committee members of political parties and those holding high-level position in state-owned or quasi-state enterprises fall under the PEP category.
The directive has also asked the BFIs to ensure that none of their costumers use the locker service to store contrabands like explosives, arms and ammunition, objects used in terrorism and drugs.
Meanwhile, the central bank has relaxed the black listing procedure of the borrowers that have taken loans against promoter shares of the BFIs and failed to pay back by the due date.
Now, the BFIs should publish a 35-day notice and recommend the Credit Information Centre to black list such customers within seven working days.
Earlier, the BFIs could recommend names of loan defaulters for blacking listing within 21 days from the last date of repayment without publishing a notice.
Such an amendment was made in unified directives to strike a parity with other government procedure.
The NRB has also barred any borrower or group of borrower from leaving a project that is financed by a consortium before it comes into operation.
“There were many instances in the past wherein a member or more of a group of borrowers have left the project before it comes into operation. This has delayed the operation of the project and loans have gone bad,” said the NRB official. “This directive has been brought out to curb such issues.”
In the directive, the central bank has also asked the BFIs to reduce the share of their institutional deposits to 50 percent of the total deposits, from the existing 60 percent.