DCGC set to increase paid up capital

KATHMANDU,DEC 21: 

Deposit and Credit Guarantee Corporation (DCGC) is increasing its paid up capital to Rs 1 billion within this fiscal year after issuing bonus shares. “It will issue bonus shares worth Rs 20 million soon to help it increase paid up capital to Rs 1 billion from current Rs 980 million,” informed general manager of the corporation Bhola Prasad Sharma Adhikari. 

The deposit insurer is planning to recapitalise 40 per cent of its profit from last fiscal year by distributing bonus shares to the share holders instead of cash dividend. According to the unaudited financial report of the last fiscal year, the corporation has earned about Rs 50 million as net profit last fiscal year. The government has also recently provided half a billion rupees to the corporation making its paid up capital Rs 980 million from earlier Rs 480 million.

The financial contribution from the government is in line with the budget for the current fiscal year to fortify the corporations’ ability to provide deposit insurance service to the banks and financial institutions. The government has promised to invest an additional Rs 500 million in the corporation to increase its paid-up capital to Rs 2 billion.

Last fiscal year too, the government had contributed Rs 250 million to build up deposit insurer’s financial strength to make it able to insure deposits of the banks and financial institutions. “It has covered depo-sits of 29 commercial banks, 84 development banks, 73 finance companies and two microfinance institutions worth over Rs 150 billion.”

Source: THT