Nepal Rastra Bank (NRB) formally took over the management of the Nepal Bangladesh Bank (NBB) from Sunday to avoid possible financial catastrophe.

The Board meeting of the central bank took the decision to this effect and assigned a four-member management team led by Maha Prasad Adhikari, director at NRB’s Bank Supervision Department.

Other members of the new management team include Bhisma Raj Dhungana, Keshav Bahadur KC and Sachin Jung Rayamajhi.

Holding a press conference, the central Bank informed that the management was taken into control as per the NRB Act 2058 BS.

Coordinator of the management team Adhikari informed that the Bank took the responsibility as per the request of Nepal Bangladesh Bank.

The NRB team would put its efforts to regain the lost glory of NB Bank and take any steps to make it a financially viable and competent commercial bank, Adhikari promised. He also said that the previous management and board would also come under scrutiny.

Threatened by the possibility of going bankrupt due to panic withdrawals by its clients, the NB Bank management on Saturday had approached the central bank for taking over its management. All the board members of NB Bank also tendered their resignations en masse on Saturday.

“Today onwards the NRB will run the bank. We will put all our efforts to make it financially viable and retain its lost credibility,” reports quoted Rabindra Prasad Pandey, executive director at NRB, Bank Supervision Department as saying.

Thousands of depositors thronged all the branches nationwide of the bank after reports that NBB Board of Directors and management misused bank resources, putting depositors’ money, amounting to around Rs 13 billion at risk.

The run on the bank started after reports surfaced that about Rs 2.0 billion was withdrawn in the last three days.

Earlier, NBB had moved to the Court, seeking a stay order, as it came to know about the central bank’s plan to take over its management, announcing it a troubled bank. After the situation went out of hand, the bank’s board of directors resigned in-masse on Saturday, allowing the NRB to control the Bank’s management.

The bank is a joint venture of Nepal’s NB Group and IFIC Bank, Bangladesh. The bank’s non-performing loans (NPL) is estimated to be at an alarming 25 percent and its total net worth is reported to be almost negative.