Small depositors may get back partial deposits.

REPUBLICA
KATHMANDU, Sept 13: Small depositors of troubled Nepal Development Bank (NDB), which is subjugated at the Patan Appellate Court for liquidation, could be allowed to withdraw 50 percent of their savings or Rs 200,000, whichever is higher, before the Dashain festival that is a couple of weeks away. The possibility emerged after the court-appointed investigation authority TR Upadhyaya, mandated to suggest norms for refunding savings of small depositors, recommended the county to allow small depositors withdraw part of their savings. The central bank that previously assured the small depositors of getting their deposits back has also given its nod for partial withdrawal.
"I made the recommendation considering that many of you might direly need the money to celebrate upcoming festivals," said senior chartered accountant TR Upadhyaya, addressing the depositors and public shareholders of the bank. He, however, clarified that his proposal would need approval of the court to come into implementation.Depositors of the bank said they were hopeful of the court taking ´practical´ considerations while deciding on the matter on Wednesday.Upadhyaya elaborated that he was under a serious pressure of categorizing small depositors from other depositors. "There are small-time depositors as well, and if I say all-time deposit holders are big, then it will be great injustice for them. Unfortunately, the existing laws do not size depositors as small or big," said he.As for the fate of the bank, whose all assets have been frozen and which has been pushed for liquidation by the central bank, Upadhyaya said he was still working on whether the bank can be sustainably restructured.
According to the information disseminated at the program, a group led by Badri Bhattarai have submitted NDB revival proposal to the investigation authority, promising to re-inject capital of Rs 640 million -- something that is needed to do away with its negative net worth. The team also includes past promoters and has already deposited capital of Rs 250 million. It has also submitted a commitment of bank guarantee for additional Rs 240 million. The group, however, said that it will generate remaining money by disposing frozen assets of the bank and recovering Rs 90 million that the bank has deposited in Nepal Cooperatives.Responding to NDB depositors and shareholders, Upadhyaya said it would be in the interest of both individual depositors and shareholders to revive the bank than liquidate it. "But it is difficult to convince over the proposal submitted so far. I cannot say NRB to release the assets as well," said Upadhyaya. He further added that he would report his suggestions to the court soon. Based on his report, the court will decide on whether to grant permission to NRB to liquidate the bank.NRB lodged a petition at the Patan Appellate Court in June after its June 2 board meeting decided to send the long-troubled bank into liquidation, concluding that all its five-year long effort to revive the bank failed because of incompetent and defiant management.