Banks told to post capital plan online

Nepal Rastra Bank (NRB) has directed banks and financial institutions (BFIs) to post their capital increment plan on their websites. The BFIs had submitted their strategies to the central bank by mid-September as instructed. According to NRB’s directive, they are required to boost their paid-up capital fourfold in the next two years. Commercial banks have to hike their paid-up capital to Rs8 billion from the current Rs2 billion, national level development banks to Rs2.5 billion from Rs640 million and national level finance companies to Rs800 million from Rs200 million. “We have asked them to post their capital increment plan on their websites for greater transparency,” said Trilochan Pangeni, spokesperson of the central bank. “If the banks themselves make their capital increment plan transparent, the central bank will not have to explain them.”  A number of foreign joint-venture banks have requested NRB to consider extending the deadline for submitting their capital increment plans. Nepal SBI Bank, Everest Bank and Standard Chartered Bank Nepal have asked for more time explaining that they needed to get their plans okayed by their foreign promoters, according to NRB. A majority of the old banks like Everest Bank, Nepal Investment Bank and Himalayan Bank have said that they could increase their paid-up capital by issuing bonus and rights shares, while others said they would issue preferential shares. Likewise, many new banks plan to meet the capital requirement through mergers, NRB said. Source: The Kathmandu Post