" BFIs that fail to meet new capital requirement to face stringent action "
Nepal Rastra Bank (NRB), the banking sector regulator, has warned that it would take stringent actions against banks and financial institutions (BFIs) that fail to meet the new minimum paid-up capital requirement within the deadline of mid-July, 2017.
The actions include ban on deposit collection, credit extension, declaration and distribution of cash dividend and bonus shares, and opening of new branch offices.
In this regard, NRB has directed all BFIs to submit concrete plans on meeting the new minimum paid-up capital requirement within the deadline of mid-July, 2017.
“The capital plan must be submitted at NRB by September 17. It must include a timetable and clearly mention how BFIs intend to raise the paid-up capital (to meet the new regulatory level) within the deadline,” says an NRB directive issued today.
Issuing the Monetary Policy on July 23, NRB had instructed BFIs to raise minimum paid-up capital by up to four times to a whopping Rs eight billion in the next two years.
As per the directive issued today, commercial banks will have to increase minimum paid-up capital from the existing Rs two billion to Rs eight billion within mid-July, 2017.
Also, national-level development banks will have to raise minimum paid-up capital from Rs 640 million to Rs 2.5 billion within that period. Meanwhile development banks operating in four to 10 districts and one to three districts, excluding those in Kathmandu Valley, will have to jack up minimum paid-up capital from the existing Rs 200 to Rs 300 million and Rs 100 to Rs 300 million, respectively, to Rs 1.2 billion and Rs 500 million.
Likewise, national-level finance companies, including those operating in four to 10 districts, will have to raise minimum paid-up capital from Rs 300 million to
Rs 800 million, while finance companies operating in one to three districts, excluding those in Kathmandu Valley, will have to increase paid-up capital from Rs 100 to Rs 300 million to Rs 400 million within mid-July, 2017.
“BFIs can factor in bonus shares proposed for fiscal year 2016-17 while calculating the paid-up capital,” says the directive
source: the himalayan times, 6 august 2015
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Nepal Rastra Bank (NRB), the banking sector regulator, has warned that it would take stringent actions against banks and financial institutions (BFIs) that fail to meet the new minimum paid-up capital requirement within the deadline of mid-July, 2017.
The actions include ban on deposit collection, credit extension, declaration and distribution of cash dividend and bonus shares, and opening of new branch offices.
In this regard, NRB has directed all BFIs to submit concrete plans on meeting the new minimum paid-up capital requirement within the deadline of mid-July, 2017.
“The capital plan must be submitted at NRB by September 17. It must include a timetable and clearly mention how BFIs intend to raise the paid-up capital (to meet the new regulatory level) within the deadline,” says an NRB directive issued today.
Issuing the Monetary Policy on July 23, NRB had instructed BFIs to raise minimum paid-up capital by up to four times to a whopping Rs eight billion in the next two years.
As per the directive issued today, commercial banks will have to increase minimum paid-up capital from the existing Rs two billion to Rs eight billion within mid-July, 2017.
Also, national-level development banks will have to raise minimum paid-up capital from Rs 640 million to Rs 2.5 billion within that period. Meanwhile development banks operating in four to 10 districts and one to three districts, excluding those in Kathmandu Valley, will have to jack up minimum paid-up capital from the existing Rs 200 to Rs 300 million and Rs 100 to Rs 300 million, respectively, to Rs 1.2 billion and Rs 500 million.
Likewise, national-level finance companies, including those operating in four to 10 districts, will have to raise minimum paid-up capital from Rs 300 million to
Rs 800 million, while finance companies operating in one to three districts, excluding those in Kathmandu Valley, will have to increase paid-up capital from Rs 100 to Rs 300 million to Rs 400 million within mid-July, 2017.
“BFIs can factor in bonus shares proposed for fiscal year 2016-17 while calculating the paid-up capital,” says the directive
source: the himalayan times, 6 august 2015
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