Kathmandu. Garima Bikas Bank for the current fiscal year 2082. Although the financial statements for the third quarter of FY83 have increased from outside, there are signs that the bank’s actual financial health is becoming risky. Serious questions have been raised about the leadership ability of CEO Madhav Prasad Upadhyay, especially after the bank’s bad loans reached the danger level. <\/p>\n
The non-performing loan ratio (NPL) of the bank has reached 4.77 percent. This figure, which is only slightly below the regulatory limit of the Nepal Rastra Bank, indicates that the bank’s loan recovery system has almost failed. Last year, the NPL was 4.78 percent. That is, even after a year, the management has not been able to bring about any significant improvement in the control of bad loans. <\/p>\n
In the banking sector, 5 percent of bad loans are considered a sign of high risk. In such a situation, the distribution of dividends to the bank may also be restricted by the regulator. However, the bank seems to be pushed towards more risk as the management led by CEO Upadhyay has not been able to make loan recovery effective. <\/p>\n
The bank has to set aside an impairment charge of Rs 390.4 crore only to manage the potential loss as the borrowers do not pay the principal and interest on time. This shows that the bank’s internal debt management and risk control system is weak. <\/p>\n
While the management blamed the challenging state of the economy, banking analysts attribute the weakness of the leadership to the mobilization of the recovery mechanism. The bank’s financial position is under pressure due to lack of effective monitoring, control of risky loans and recovery strategies. <\/p>\n
According to the financial report, the bank has earned a net profit of Rs 1.04 billion. However, the distributable profit has been limited to Rs 62.72 crore after allocating the amount to various funds as per the regulatory provision. This indicates that the bank’s profitability is based more on accounting than on actual cash capacity and shareholder profit. Although the earnings per share reached Rs 23.21, the expected return for the investors is low due to weak distributable profit. <\/p>\n
CEO Upadhyay accused of failed leadership<\/strong><\/span><\/p>\n Rising bad loans, poor recovery, high-risk expenses and limited distributable profit have raised questions about the management capacity of Garima Development Bank. In particular, there is talk of growing dissatisfaction within the bank because CEO Upadhyay has not been able to give a clear strategy to get the bank out of the risk. <\/p>\n Although the profit has increased quantitatively, the real position of the bank is weakening, according to the financial statements. Investors and market circles are worried that Garima Development Bank could be pushed towards further crisis if corrective steps are not taken in time. <\/p>\n Upadhyay has been the CEO of the bank since Baisakh 2081. Bank employees say that the bank was expected to reach new heights after he went to the bank, but that has not happened. <\/p>\n Upadhyay, who has spent a long time in the same bank, had high expectations from the bank, but it has not been as expected. The challenge to the financial health of the bank seems to be increasing.<\/p>\n","protected":false},"excerpt":{"rendered":" Kathmandu. Garima Bikas Bank for the current fiscal year 2082. Although the financial statements for the third quarter of FY83 have increased from outside, there are signs that the bank’s actual financial health is becoming risky. Serious questions have been raised about the leadership ability of CEO Madhav Prasad Upadhyay, especially after the bank’s bad […]<\/p>\n","protected":false},"author":16,"featured_media":301612,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45117,45031,45159],"tags":[],"class_list":["post-301615","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bank-finance-en","category-banner-news-en","category-news-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/301615","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=301615"}],"version-history":[{"count":1,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/301615\/revisions"}],"predecessor-version":[{"id":301616,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/301615\/revisions\/301616"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/301612"}],"wp:attachment":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=301615"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=301615"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=301615"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}