The Auditor General has raised serious concerns over the National Savings Bank (NSB) for granting a US$ 9 million loan to a private tourism company in the Maldives—an action deemed to be in violation of the bank’s legal mandate.
According to the Auditor General’s latest report, the loan, which was extended to RPI Pvt Ltd in 2018, has now been classified as non-performing. The report highlights that the loan was issued without a proper credit or risk assessment and remains unpaid, casting doubts over the regulatory oversight and governance at the state-owned financial institution.
The borrower, RPI Pvt Ltd, has not made any capital repayments or paid the arrears interest amounting to US$ 4.18 million, which remained outstanding as of 31 May 2024.
The report further states that the loan was granted for the construction of villas by a company operating in the tourism sector in a foreign country—a purpose that falls outside the scope defined in the National Savings Bank Act. It was also noted that the NSB had not provided evidence of conducting a comprehensive credit or risk evaluation prior to disbursing the loan.
Although the bank initially granted a one-year grace period for capital repayment following disbursement, this period was repeatedly extended until 2022. Despite this leniency, no capital repayment had been made by the borrower up to 31 December 2023.
Moreover, the borrower, being a foreign entity, does not fall under the purview of Circular No. 5 of 2020 issued by the Central Bank. Nevertheless, the bank extended concessions to the company under this circular. The Auditor General’s report also noted that no independent technical inspection had been carried out to assess the project, despite the non-performing status of the loan.
As of 31 December 2023, the arrears of interest and total loan amount—classified under foreign loans—contributed to a cumulative sum of Rs. 3,800 million, which includes the US$ 9 million loan issued to the Maldivian company.
In terms of overall financial performance, the NSB’s asset base showed a slight increase, reaching Rs. 1,710 billion by the end of October 2024, compared to Rs. 1,687 billion at the end of 2023. The bank’s deposit base also recorded a 2.2 percent growth.
