Kathmandu, September 17

All the banks and financial institutions (BFIs) have submitted their plans to Nepal Rastra Bank (NRB) within the deadline of September 17 on how they are going to raise their paid-up capital.

NRB had raised the paid-up capital requirement of BFIs by up to four folds through the monetary policy this year and directed the BFIs to submit their plans within September 17. As per the provision, BFIs must raise their paid-up capital based on the provision of the monetary policy by mid-July 2017.

As per NRB Spokesperson Trilochan Pangeni, two commercial banks, namely, Standard Chartered Bank Nepal and Nepal SBI Bank, have informed NRB that they have written to their head offices about the new rule and will submit their plans once they get a response from their respective head offices.

Likewise, the government-owned Rastriya Banijya Bank and Agricultural Development Bank already meet the paid-up capital requirement imposed by NRB.

Most of the BFIs have floated the idea of mergers and issuing bonus and rights shares to meet the capital requirement. NRB, through the monetary policy, raised paid-up capital requirement of commercial banks or class ‘A’ financial institutions by four times to Rs eight billion. There are 30 commercial banks in the country.

Likewise, national level development banks or class ‘B’ financial institutions need to meet capital requirement of Rs 2.5 billion, development banks that work in four to 10 districts need to raise paid-up capital to Rs 1.2 billion, and development banks which have limited working area of one to three districts need to meet capital requirement of Rs 500 million.

Similarly, national level finance companies or class ‘C’ financial institutions have to meet capital requirement of Rs 800 million and the finance companies that have limited working area of one to three districts need to raise their paid-up capital to Rs 400 million. There are 76 development banks and 48 finance companies in the country.