Deadline for paid-up capital increment of Dev Banks & Finance Companies working in 1 district extended for 2 years; 6 BFIs affected

Nepal Rastra Bank (NRB) has extended deadline for Class ‘B’ and ‘C’ financial institutions operating in a single district to meet the requirement of minimum paid-up capital within Poush 2076. The directive was issued yesterday. As per the capital requirement, Class ‘B’ financial institutions operating in a single district should maintain a minimum paid-up capital of Rs. 50 crore. In the same vein, Class ‘C’ financial institutions operating in one district were supposed to maintain minimum paid-up capital of Rs.40 crore. Earlier, the deadline was the end of FY 2073/74. The newly circulated directive, however, made it clear that necessary punitive action would be taken against other Class ‘B’ and ‘C’ financial institutions that have failed to meet the new capital requirement within the previously instructed time. The new directive affects the following BFIs:

1. Hamro Bikas Bank, Nuwakot
2. Kabeli Bikas Bank, Dhankuta
3. Mount Makalu Development Bank, Tehrathum
4. Sahara Bikas Bank, Sarlahi
5. Salapa Bikas Bank, Khotang
6. Multipurpose Finance Company, Saptari

Note: Kabeli Bikas Bank is acquiring Mount Makalu Development Bank after which the merged entity will float 118% right shares. Sahara Bikas Bank has entered into an agreement to be acquired by Deva Bikas Bank Limited.