E-Kantipur

KATHMANDU, FEB 24 - Depositors of Nepal Development Bank (NDB) could get back 75 percent of their deposits in the bank.

The bank's liquidator Narayan Bajaj said on Tuesday that NDB could generate cash amounting to at least Rs. 550 million from all the avenues including the existing cash, loans, non-banking assets (fixed assets acquired by the bank from those who have taken loans), investment in Gorkha hydro

and its deposits in Nepal Cooperatives.

"The money is adequate to pay back 75 percent of the money of the depositors," he said at a press meet. According to him, the bank has liabilities of Rs. 210 million to ordinary depositors, Rs. 330 million to the Employee Provident Fund and Rs. 180 million to the Army Welfare Fund.

The liquidator is going to start distributing the second instalment of the money to the depositors from Wednesday. The liquidator has already issued a notice that it would pay back money up to Rs. 800,000 subject to adjustment of the money distributed a few months ago to individuals as well as small institutional depositors.

"The bank has Rs. 120 million in cash available currently," said Bajaj. "We are going to distribute around Rs. 110 million this time." Earlier, the depositors had taken away Rs. 27.5 million. The liquidator said that 98 percent of the total 3,391 depositors would get back cent percent of their deposits this time.

"About 60 big depositors including the EPF and the army, however, will not be getting back their all money this time," said Bajaj. Even the army will be getting back its deposits, according to Bajaj. "But the EPF will not be getting back its deposits as they have been put into other liabilities in the balance of NDB." The army has not taken away its deposits in the earlier instalment too.

According to the liquidator, the deposits are being paid back as per the Patan Appellate Court's order to pay back deposits by making appropriate criteria in consultation with Nepal Rastra Bank.

Although the central bank has asked the liquidator to follow the Bank and Financial Institution Act (BAFIA) that has given ordinary savings depositors first priority, Bajaj said he chose the middle path as the court's order was not based on the BAFIA. The Insolvency Act has, however, put all the depositors under the same category.

The liquidator, however, made it clear that the shareholders would not be getting back a single penny. 

•     Depositors to get their money back from Wednesday
•     98 percent depositors to get cent percent return
•     77 percent of total deposits could be returned
•     Army will get the deposits back, EPF will not

Assets of NDB

Particulars    Amount (Rs.)

Cash    120 million

Non-Banking Assets    140 million

Good loans    170 million

Bad loans     50 million

Nepal Cooperative    105 million

Gorkha Hydro    10 million

Other assets    2.5 million

Posted on: 2010-02-24 09:06

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