Business

Deadline for revised paid-up capital requirement won’t be extended: NRB

Buil00000117-1024x759_med.jpg

Kathmandu, June 12

Nepal Rastra Bank has said there will be no revision in the fast approaching deadline given by the central bank to the banks and financial institutions (BFIs) to raise their paid-up capital.

Inaugurating the joint operation of Century Commercial Bank after its acquisition of Innovative and Araniko Development Banks, Nepal Rastra Bank (NRB) Governor Chiranjibi Nepal said that the central bank will take action against BFIs that do not meet revised paid-up capital requirement.

The central bank may put a cap on deposit collection, credit expansion and branch expansion of the BFIs that do not meet the paid-up capital requirement fixed by the central bank.

Stating that the paid-up capital requirement for BFIs had been raised for stability of the financial sector, Governor Nepal further said stable financial system is a must for sustainable and inclusive growth of the economy.

By mid-July this year, commercial banks need to meet the revised paid-up capital requirement of Rs eight billion.

The requirement for national level development bank  has been set at Rs 2.5 billion, development banks working in four to 10 districts should have paid-up capital of Rs 1.2 billion, and development banks working in one to three districts should have such capital of Rs 500 million.

The paid-up capital requirement for  national level finance companies has been set at Rs 800 million and finance companies working in one to three districts should have paid-up capital of Rs 400 million, as per the central bank.

During the joint operation inauguration programme here today, Century Commercial Bank informed that its paid-up capital currently stands at Rs 4.71 billion, but the bank will be able to meet the paid-up capital requirement as its joint operation with Sagarmatha Finance, Alpine Development Bank and Seti Finance will begin within this fiscal.

Century Commercial Bank is also preparing to issue 40 per cent rights share to meet the paid-up capital requirement of Rs eight billion by the end of this fiscal.