Profit of RBB’s branch in Birgunj plunges

By Our correspondent

Birgunj, July 30: The profit of the Rastriya Banijya Bank’s Adarshanagar branch in Birgunj has plunged from Rs. 106 million in the fiscal year 2056/57 to less than a million in the fiscal year 2057/58. Even the profit of Rs. 106 million was a far cry from Rs. 142 million profit the bank had made in the previous year.

The branch was the bank’s second largest profit-earning branch among RBB’s 200 branches across the country after Kathmandu’s Bishal Bazaar branch. The branch has topped advancing loans after it incurred huge losses, said branch manager Hemanta Raj Joshi.

He said RBB central office had instructed the branch not to forward new loans until it would recover the old ones.

But employees of the bank say the main reason behind profit fall was excessive loans with inadequate collateral. They said the bank was mired in commissioneering in cases of loans disbursement. They also said the branch is on the verge of collapsing. Branch manager Joshi said about 20 per cent of the debtors have failed to pay back both the principal and the loans while the employees maintained this figure was between 40 to 50 per cent.

Sources at the bank say after there were fears of defaults on the big loans the bank had tried to auction the coallterals, mainly land, to recoup its loans but nobody came to buy them because of overvaluation of land. This, the source said, was because the collaterals were overvalued.

But what is more surprising is that how a bank, which had made a profit of more than 100 million rupees a year ago, could come down to less than a million mark in the next year. Employees said there was a nexus between the organized groups of businesspersons and senior bank officials to pull the bank to its knees. One example of how the bank has been robbed is, one Bishnu Mittal, in the name of Blessing International, imported Rs. 29.4 million worth of chilly through LC but without any collateral.

But when the Central Region Cold Storage, which also belongs to Mittal and his brothers, failed to pay its debt the bank took steps to nob the Mittal Brothers in a fraud case. Joshi said the bank had sent a letter to the police three months ago, but the police had failed to take any action against them.

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