Samjhana liquidation: Depositors at the receiving end

KAVRE, FEB 10 -

Following the central bank decision to initiate liquidation process of crisis-ridden Samjhana Finance Company, depositors fear that they might lose their money.

The Nepal Rastra Bank (NRB) board on Monday decided that the finance company will be sent into liquidation if its board failed to convince the central bank within 15 days.

Among the star-crossed depositors is 75-year-old Punimaya Manandhar of Banepa-8. She has Rs 643,000 deposited in the finance company. Manandhar has been frequenting the finance company for the last few weeks to withdraw her deposits, but she was always told, “Today we do not have money, come tomorrow.”

Her husband had deposited the money in Samjhana four years ago in a fixed deposit account to be matured in two years.

Bal Krishna Shrestha of Banepa-10 has a similar story. “The company had a very good image earlier,” said Shrestha. “However, its reckless lending ruined it.” He complained that he has not been able to withdraw his deposits despite approaching the company every day.

Similarly, Krishna Thapa from Panauti-4 has sought central bank’s help to get back his deposits. “Those responsible for the current situation of the finance company must be penalised,” he said.

With an increasing number of customers approaching Samjhana to withdraw their money, its manager has reduced his arrival. Samjhana staffers’ job has been limited to asking depositors to come next day. Bank directors do not come to the office regularly to avoid meeting with depositors.

The finance company that was established in 1995 had opened a contact office in 1997 in Bhaktapur. It opened branch offices in Kathmandu and Lalitpur in 1999 and 2000, respectively. Among these branches, there are more depositors in Lalitpur branch, according to a company staff. People have deposited up to Rs 2 million in the branch.

A staff said the bank’s health deteriorated after its promoters took loans to for themselves and their kin without putting up collateral. Former chairmen of the company Shyam Bahadur Shrestha and Pawan Bir Malakar had lent millions of rupees to their relatives against banking norms. They also made haphazard lending without taking adequate collateral, according to a source. After the company headed towards collapse, Shrestha and Malakar along with other directors Santosh Man Shrestha and Sampurna Das Tuladhar resigned from their posts citing personal reasons. Last year, some new groups tried to rescue the company, but failed.

As per the latest due diligent audit report, the company currently has outstanding loans worth Rs 285 million and deposits of Rs 220 million in open accounts. DDA had also found hidden accounts of deposits and credits. The institution has additional deposits of around Rs 200 million and loans worth Rs 100 million in hidden accounts.

Posted on: 2011-02-10 09:16

Source: MANOJ BASNET ,http://www.ekantipur.com/2011/02/10/business/samjhana-liquidation-depositors-at-the-receiving-end/329396.html