Nepal Rastra Bank (NRB) has taken various regulatory actions against six Class “D” microfinance financial institutions and their officials during the fourth quarter of fiscal year 2082/83.

According to the NRB's Microfinance Institutions Supervision Department, four microfinance companies were placed under Prompt Corrective Action (PCA) after failing to maintain the required minimum capital adequacy ratio, while two institutions were fined for failing to maintain the mandatory cash reserve requirement.

Forward Microfinance Financial Institution Limited, Sunsari, maintained a minimum capital adequacy ratio of only 6.12% as of the end of Ashadh 2082. As the institution failed to maintain the required regulatory capital level, NRB took action under Regulation 3(a) of the Prompt Corrective Action Bylaw for Banks and Financial Institutions, 2074. The action was taken on Baisakh 8, 2083.

Similarly, Dhaulagiri Microfinance Financial Institution Limited, Baglung, maintained a minimum capital adequacy ratio of 6.38% as of the end of Ashadh 2082. NRB initiated prompt corrective action against the institution under Regulation 3(a) on Baisakh 10, 2083.

Matribhoomi Microfinance Financial Institution Limited, Budhanilkantha, Kathmandu, maintained a minimum capital adequacy ratio of only 4.08% as of the end of Ashadh 2082. NRB took prompt corrective action against the institution under Regulation 3(b) on Baisakh 29, 2083.

Likewise, NIC Microfinance Financial Institution Limited, Banepa, maintained a minimum capital adequacy ratio of 6.39% as of the end of Ashadh 2082. NRB took prompt corrective action against the institution under Regulation 3(a) on Ashadh 12, 2083.

Meanwhile, Wean Nepal Microfinance Financial Institution Limited, Banepa, Kavrepalanchok, was fined for failing to maintain the mandatory cash reserve requirement in Chaitra 2082. NRB imposed a cash penalty of Rs. 58/38 for the first instance, with the action taken on Ashadh 23, 2083.

Sanjeevani Microfinance Financial Institution Limited, Tulsipur, Dang, was also fined for failing to maintain the mandatory cash reserve requirement. According to NRB's details, the institution failed to maintain the required reserve during Chaitra 2082 and Baisakh, Jestha and Ashadh 2083, resulting in cash penalties at different stages.

Overall, the six microfinance institutions faced regulatory action for issues related to capital adequacy and mandatory cash reserve requirements, with four institutions placed under prompt corrective action and two subjected to monetary penalties