The statement states, ”Section (57) of the Banks and Financial Institutions Act gives special powers to banks and financial institutions to recover loans in cases where they are not recovered. Therefore, the auction of collateral is within the primary process of the bank and falls within the primary responsibility of the Chief Executive Officer.”
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All four central associations related to banks and financial institutions have expressed their concern over the police arrest of Jyoti Prakash Pandey, the Chief Executive Officer (CEO) of Nepal Investment Mega Bank (NIMB).
Issuing a joint statement on Thursday, the Nepal Bankers Association, Development Payment Bankers Association Nepal, Nepal Financial Institutions Association and Microfinance Bankers Association said that they have drawn attention to the arrest of CEO Pandey by the Nepal Police and the Central Investigation Bureau on Wednesday.
‘It is well known that banks, financial institutions and microfinance institutions have been collecting deposits from the general public and disbursing loans in a manner that supports the country's economic growth, employment creation and entrepreneurship development in accordance with the Banks and Financial Institutions Act, 2073 BS and the policies/guidelines issued by Nepal Rastra Bank,’ the statement said. ‘Section (57) of the Banks and Financial Institutions Act has given special powers to banks and financial institutions to recover loans in cases where loans have not been recovered.’ Therefore, the mortgage auction is within the primary process of the bank and falls within the primary responsibility of the CEO.'
The bankers' associations claim that the arrest of the CEO could damage the bank's reputation and undermine the stability of the bank due to the fact that the bank, which operates on the trust of the public by collecting deposits from the general public, has collected loans.
Keeping in mind the reputation of the bank and the dignity of the position of CEO, the bankers' associations have appealed to the bankers to release CEO Pandey from detention as soon as possible and to move the investigation process forward.
