Nepal Rastra Bank (NRB) Monday rejected a request by Nepal Bankers
Association (NBA) to reconsider the two-year deadline it recently set
banks to increase their minimum paid-up capital to Rs 8 billion.
Meeting NRB Governor Chiranjibi Nepal on Monday, an NBA delegation urged the central bank to change the deadline for raising their minimum paid-up capital requirement to end of Fiscal Year 2020/21 from the current deadline of end of Fiscal Year 2016/17.
According to a source, the central bank, however, flatly rejected the bankers' plea.
"NBA requested the central bank to provide some more time, or five years, to raise their minimum paid-up capital as the current deadline seems rather short," a chief executive officer of a commercial bank told Republica requesting anonymity.
"However, the central bank did not seem positive to our request. The governor said that there was enough time for bank and financial institutions (BFIs) to increase the recently-set minimum paid-up capital requirement," he added.
Bankers have been expressing discontentment over the provision introduced by the central bank that requires BFIs to boost their paid-up capital by four times within two years.
Earlier on Thursday, NRB had directed BFIs to present their capital plans with clear timetable to its BFIs Regulation Department by mid-September this year. In its circular, it had also warned that it will take action against those BFIs that failed to meet the minimum paid-up capital requirement by the deadline. It had said that it would ban such banks from distributing bonuses and dividends, mobilizing deposits and credit, and opening branch offices.
The new provision requires commercial banks to increase their paid-up capital by four times to Rs 8 billion within the coming two years.
Similarly, national-level development banks have been asked to raise their paid-up capital to Rs 2.5 billion, while development banks that have working areas of four to 10 districts will have to raise paid-up capital to Rs 1.2 billion.
Similarly, development banks having working areas of one to three districts will have to increase their capital base to Rs 400 million
National-level finance companies and other finance companies with working areas of four to 10 districts will have to increase their capital base to Rs 800 million while finance companies with working areas of one to three districts will have to raise their paid-up capital to Rs 400 million.
source: republica, 11 august 2015
Meeting NRB Governor Chiranjibi Nepal on Monday, an NBA delegation urged the central bank to change the deadline for raising their minimum paid-up capital requirement to end of Fiscal Year 2020/21 from the current deadline of end of Fiscal Year 2016/17.
According to a source, the central bank, however, flatly rejected the bankers' plea.
"NBA requested the central bank to provide some more time, or five years, to raise their minimum paid-up capital as the current deadline seems rather short," a chief executive officer of a commercial bank told Republica requesting anonymity.
"However, the central bank did not seem positive to our request. The governor said that there was enough time for bank and financial institutions (BFIs) to increase the recently-set minimum paid-up capital requirement," he added.
Bankers have been expressing discontentment over the provision introduced by the central bank that requires BFIs to boost their paid-up capital by four times within two years.
Earlier on Thursday, NRB had directed BFIs to present their capital plans with clear timetable to its BFIs Regulation Department by mid-September this year. In its circular, it had also warned that it will take action against those BFIs that failed to meet the minimum paid-up capital requirement by the deadline. It had said that it would ban such banks from distributing bonuses and dividends, mobilizing deposits and credit, and opening branch offices.
The new provision requires commercial banks to increase their paid-up capital by four times to Rs 8 billion within the coming two years.
Similarly, national-level development banks have been asked to raise their paid-up capital to Rs 2.5 billion, while development banks that have working areas of four to 10 districts will have to raise paid-up capital to Rs 1.2 billion.
Similarly, development banks having working areas of one to three districts will have to increase their capital base to Rs 400 million
National-level finance companies and other finance companies with working areas of four to 10 districts will have to increase their capital base to Rs 800 million while finance companies with working areas of one to three districts will have to raise their paid-up capital to Rs 400 million.
source: republica, 11 august 2015
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