HIMALAYAN NEWS SERVICE
KATHMANDU: Gurkha Development Bank’s chief executive officer (CEO) has resigned leaving the revival of the troubled financial institution in the lurch.
“CEO Krishna Kumar Bhattarai’s resignation will increase difficulty of the bank to get back to its old self,” said an official of the bank. Bhattarai was appointed CEO of the problematic-declared development bank in May 2011, to restructure its financial situation.
Though it has recovered a substantial amount of loans, its capital adequacy is negative by 10 per cent with non performing assets of 50.69 per cent. The bank had run into trouble due to the involvement of its directors in embezzling its funds.
Gurkha’s financial irregularities came to light after a borrower accused former chairman and some high level officers of the bank of embezzling his funds in January. On further probe by Nepal Rastra Bank (NRB), the bank was found to be involved in a few other shady lendings. Due to poor governance, its financial health had deteriorated compelling NRB to declare it problematic in March 2011.
It was not allowed to mobilise deposits or float loans after being declared a troubled financial institution. It has returned deposits worth about Rs 1.9 billion since the past year, while its deposits at present stands at Rs 2.71 billion and its total lending stands at Rs 3.7 billion.