After Shine Resunga Development Bank's Right Shares Disapproval, NRB Now Disapproves Tinau Mission Development Bank's Proposal to Issue Right Shares

Nepal Rastra Bank has been compelling banks and financial institutions to merge.

NRB had increased the minimum paid-up capital so that institutions would have to merge with each other. However, as a loophole, companies had thought of issuing the right shares in order to increase their paid-up capital themselves. To prevent this, NRB had formally prevented microfinance companies from issuing the right shares. 

Its recent actions show that NRB is also compelling institutions of other sectors to merge with each other by rejecting the proposal to issue the right shares, even though it hasn't formally prevented them.

Just a few days ago, Shine Resunga Development Bank Limited issued a notice acknowledging the amendments made by NEPSE in the company's proposal. Shine Resunga had proposed the right shares in the ratio of 4:1 after acquiring Purnima Bikas Bank Limited and Bhargav Bikash Bank Limited in order to increase its paid-up capital. However, Nepal Rastra Bank did not approve of this proposal.

And now, it is Tinau Mission Development Bank. The company's 13th AGM had passed the distribution of 12% of paid-up capital as bonus shares and right shares of Rs. 60.43 crores. However, NRB did not approve of the issuance of the right shares.