People’s Finance exec chair found involved in huge financial irregularities

Nepal Rastra Bank (NRB) has revealed that the executive chairperson of People’s Finance, Chhabilal Bhusal, has been found involved in large amount of financial irregularities in the company.

The special inspection team deployed by the NRB found that Bhusal was involved in many irregularities while issuing loans and has also taken loans for himself in the name of other borrowers from the company.

According to the bank and financial institution act (BAFIA), promoters of the bank and financial institutions cannot issue loans for themselves from their own company.

Bhusal has been found making huge investment in real estate and housing sector from the loan he took from his own company, according to a NRB source.

All branches of People's Finance Company including the head office have closed from Monday as the company could not reimburse its depositors.

The finance company was closed issuing a notice on Monday. The notice said, the company cannot open due to technical reasons.

The company fell into extreme financial crisis after an institutional depositor, Nepal Rastra Bank (NRB), withdrew Rs 70 million deposited in fixed account last week.

The company, with a paid-up capital of about Rs 280 million, has issued loans worth almost Rs 1 billion. Most of the investment is in real estate sector