SC show cause to NRB

Supreme Court (SC) has sought written reply from the defendants in a case filed demanding interim order against Nepal's Rastra Bank (NRB)'s direction to all financial institutions to freeze the accounts of Nepal Cooperative.
The single bench of Justice Tahir Ali Ansari also decided to call the defendants for consultation on June 16 before deciding whether interim order should be given in the case.
The Nepal Rastra Bank, Department of Cooperative, and Division Cooperative offices in Kathmandu, Pokhara and Birgunj have been made defendants in seperate writs filed by Bhakta Bahadur Rai, general manager of the Nepal Cooperative and other shareholders. Rai has argued in the writ that the NRB direction to financial institutions to freeze the account of the cooperative and its shareholders was illegal.
He has also divulged in the writ that the Bank of Kathmandu had informed them that the account of the cooperative in the bank was freezed as per the NRB direction. There is as much as Rs. 90 million deposits of Nepal Development Bank (NDB) in the cooperative which could be withdrawn if the accounts of the cooperative were not freezed," said Gopal Kafle, executive director of NRB reasoning behind the NRB action.
After NRB decided last week to initiate liquidation process of NDB for its failure to comply the NRB direction in direction towards improving its worse financial situation, the money remained in the account of the bank could be withdrawn, according to NRB. Interestingly, the chairman of both NDB and the Cooperative happened to be same person Amar Gurung which was beyond knowledge according to NRB officials.
In the writ, Rai has also mentioned the NRB's letters to Department of Cooperatives and Division Cooperative Offices written on June 3 seeking their cooperation to freeze the accounts of Nepal Cooperative. "As the cooperative has been registered as per the Cooperative Act, the NRB has no right to interfere in the cooperative," Rai has argued.
Source: Ekantipur