Kathmandu – The Nepal Stock Exchange (NEPSE) has halted second-market share transactions of Karnali Development Bank. This decision follows the declaration of the bank as ‘crisis-ridden’ by Nepal Rastra Bank on 10th Poush.
Maharaj Parajuli, spokesperson for NEPSE, informed that the share transactions have been suspended in the second market following the crisis declaration by Nepal Rastra Bank. Similarly, when Nepal Rastra Bank declared Gorkha Development Bank and Nepal Share Market Finance as ‘crisis-ridden,’ NEPSE had also halted their share transactions.
Karnali Development Bank failed to maintain the minimum capital adequacy ratio, showed weak institutional performance, and was suspected of financial embezzlement, weak liquidity, and failure to meet deposit repayment obligations. As a result, Nepal Rastra Bank declared Karnali Development Bank ‘crisis-ridden’ and took control to protect public interests. It was feared that if the bank continued to operate under these conditions, it would fail to protect depositors’ interests, potentially creating mistrust in the banking sector.