Savers of Karnali Bikas Bank get their savings back in this way

The team under the coordination of Nepal Rastra Bank Deputy Director Tikaram Khatiwada has taken over the management of Karnali Development Bank from today. Now the question is how the savers of this bank will get back. In the mandate received by the National Bank team, the money of the first priority has been returned.

According to Rashtra Bank, this bank has about 5 billion rupees in savings (deposits) and 3 billion in loans. Of the 3 billion loans, 60 percent is good, which has the possibility of immediate recovery . The team from Rashtra Bank will return the saver's money in this way . As soon as

management takes over, the team will understand the true state of the entire financial statement, including cash in the organization, debt obligations, investments in shares and bonds. If there is cash in the
organization, it will start the savings return process by collecting resources.
In the event that all the money cannot be returned at once in time according to the demand, the saver's money will be returned even after specifying the limit and day .
There are two types of savings in the bank, mainly institutional and individual. The individual saver is given first priority while withdrawing savings . Only after the payment of the individual saver is completed, it is the turn of the institutional.
Even among individual savers, small savers get money first .
The main problem of Karnali Bikas Bank is lack of liquidity. Therefore, there may not be cash with the bank. The team from Rashtra Bank has also been given rights to collect loans, sell the bank's assets, sell shares, and freeze the assets of the shareholders.
Therefore, the team will raise money through all possible efforts, including asset sales, debt recovery, interbank swaps, etc. to return the savers' money . The money raised in this way will be returned to the saver.
Karnali Bikas Bank has been stopped collecting new deposits and disbursement of loans since the Rastra Bank started prompt corrective action. Therefore, the main responsibility of the team from Rashtra Bank will be to collect money and return the savers' money.
If banks and financial institutions do not have money to return the deposit of savers, they take inter-bank remittances (taking remittances from other banks). In the case that other banks also do not give the deposit or the deposit money is not enough to return the deposit, they get the deposit from the National Bank under the 'Lender of Last Facility'.
However, for this facility, the capital fund ratio of the concerned bank should be around 11 percent as specified by the National Bank. But currently, the capital fund of this bank is about 20 percent negative . Therefore, unless the minimum capital fund ratio is maintained as specified by the National Bank, this bank will not get the 'lender of last resort' facility . The effort of the
team will be to protect the organization through the best management of assets and liabilities.
However, if there is no improvement in the organization and it cannot be saved, the team recommends the organization to be terminated .
After the organization goes into liquidation, the money from the asset sale will be paid to individual savers, institutional savers, common shareholders, founding shareholders, etc. .
After the organization goes into liquidation, the savings deposit and loan protection fund will return up to five lakh rupees in the personal account .

Savers of Karnali Bikas Bank get their savings back in this way

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