Nepal Rastra Bank (NRB) has officially lifted the Prompt Corrective Action (PCA) previously imposed on Pokhara Finance Limited, Pokhara, Kaski.

The central bank announced the decision through a notice published on Friday, stating that the corrective action would be withdrawn following progress in the institution’s financial position and its approved merger process.

Why the Corrective Action Was Imposed

According to NRB, the action had originally been imposed after supervisory review of the institution’s financial condition.

The decision was based on:

Findings from the consolidated onsite inspection report prepared using the institution’s unaudited financial statements as of Poush-end 2080, and
Offsite supervisory reports for the first quarter of FY 2081/82.

Following supervisory adjustments, Pokhara Finance’s capital indicators had fallen significantly below the minimum capital adequacy requirements set by Nepal Rastra Bank.

As a result, NRB implemented corrective measures under Regulation 3 (g) of the Prompt Corrective Action Regulations, 2074 applicable to banks and financial institutions through its letter dated 2081/10/23.

Merger with Samriddhi Finance Supports Recovery

NRB stated that the situation improved after approval was granted for the merger process between Pokhara Finance Limited and Samriddhi Finance Company Limited.

The final approval for the merger was provided through a committee decision dated 2083/01/17.

Based on the combined institution’s unaudited financial position as of Baisakh-end 2083, the merged entity is projected to maintain:

Combined Core Capital Ratio: 6.06%
**Capital Adequacy Ratio (CAR): 10.80%

These projected indicators demonstrated improvement in regulatory capital compliance.

Corrective Measures Officially Withdrawn

Considering the improved capital position after consolidation, Nepal Rastra Bank decided through its committee meeting held on 2083/03/10 to remove the prompt corrective measures imposed on Pokhara Finance.

The withdrawal of the action will become effective from the date the merged institution officially begins integrated business operations with Samriddhi Finance Company Limited.

What This Means

The lifting of prompt corrective action represents an important regulatory milestone for the institution and signals NRB’s confidence that the merged entity will maintain stronger financial stability and improved capital adequacy going forward.

The development also reflects the increasing role of mergers and consolidation in strengthening Nepal’s financial sector and improving the resilience of smaller financial institutions.

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