Central bank to allow Nepal bank raise paid up capital

KATHMANDU, NOV 14: 

Nepal Bank Ltd (NBL) might get capital injection to increase paid up capital.

The central bank deputy governor Maha Prasad Adhikari — at an interaction ‘Changed Management in NBL’ on the occasion of NBL’s 75th anniversary — hinted at the capital restructuring and capital injection to improve Nepal’s first commercial bank’s financial stability. “The central bank is going to take a crucial decision soon,” he added.

“As a leading commercial bank of Nepal, it needs to have new strategies and adapt to the changes to retain its standing,” said NBL’s management team’s chief Maheshwor Lal Shrestha.

Similarly, the experts pointed out that NBL has to prepare a strategy to transform itself into a modern bank to sustain in the market. “NBL needs to change itself according to the external environment to remain competitive,” pointed out Prof Shree Krishna Shrestha. The bank has to be prepared for the changes and adjustments in corporate structure, improve information technological infrastructure and human resource and management, he suggested.

Similarly, Prof Dr Pushkar Bajracharya also urged the bank to adapt to the changes with the transformation of structure, system and resources.

The biggest challenge for the oldest Nepali commercial bank at present is to raise necessary capital as its core capital is still negative by about Rs 4 billion. It has been going through Financial Sector Restructuring Programme (FSRP) since 2002, which has improved the bank’s performance but the bank’s core capital is yet to be positive. But the programme has already been completed ‘without fulfiling its core objectives.’

Even after eight years of reform programme, the central bank has failed to employ chief executive officer. Nepal Rastra Bank has been appointing the board of directors of NBL since the reform programme began and currently management is headed by Maheshwor Lal Shrestha.

Source: THT