How will 7 banks meet paid-up requirement? When will they hold AGM?

ShareSansar, August 31:

The seven commercial banks, which are yet to meet the paid-up capital requirement of Rs 2 arba as directed by the central bank, have decided to meet the same by pledging the bonus share by the end of the first quarter of the current fiscal year 2071/72.

The commercial banks yet to meet the paid-up requirement are Everest Bank Limited, Kumari Bank Limited, Laxmi Bank Limited, Bank of Kathmandu Limited, Lumbini Bank Limited, Nepal Credit and Commerce Bank Limited and Siddhartha Bank Limited.

Officials of all the seven commercial banks have told ShareSansar that they have already informed the central bank that they will meet the statutory requirement by issuing bonus share.

“We have already submitted our plan to the central bank proposing 10 percent bonus share to shore up our paid-up capital to Rs 2 arba. We hope the central bank will approve it soon,” said Narendra Chhatkuli, the company secretary of Kumari Bank.

Since Kumari’s paid-up capital now stands at Rs 1.82 crore, 10 percent bonus share will be enough to meet the central bank’s requirement.

Chhatkuli further informed that the bank is also planning to hold its Annual General Meeting within the month of Kartik, preferably before Tihar.

It may be noted that Everest Bank has already pledged 12 percent bonus share besides 50 percent cash dividend to the shareholders from the net profit it posted in the last fiscal year 2070/71. This amount will suffice the paid-up requirement for Everest, which currently stands at Rs 1.92 arba.

Laxmi Bank has also decided to pledge at least 5 percent bonus share and probably even higher, though 3.02 percent is enough to meet the paid-up capital requirement. Its paid-up capital now stands at 1.94 crore.

“We will announce the dividend for the last fiscal year within Bhadra as per the plan to meet the paid-up requirement and also because we want to hold our AGM preferably before Tihar,” said Laxmi’s company secretary Pyush Raj Aryal.

Bank of Kathmandu has also decided to meet up the paid-up capital requirement by proposing at least 5 percent bonus shares within Bhadra.

“We will most probably be holding the AGM itself before Tihar,” one of the senior most officials of BoK said.

Lumbini Bank, which has come up with impressive net profit of Rs 24.32 crore this time around, will also be comfortably meeting the paid-up capital requirement by issuing at least 7 bonus share.

“Though our audit report is yet to be finalized and that the BoD is yet to meet, we are in a comfortable position to meet the requirement by floating bonus shares,” a highly placed bank official said, adding that the AGM, however, may be held only toward Mangshir or even Poush.

Lumbini’s current paid-up capital stands at Rs 1.88 arba.

With the capital below Rs 2 arba, it is almost sure that Nepal Credit and Commerce Bank will distribute at least 37 percent bonus shares to its shareholders in order to meet the paid-up capital requirement. This also because a central bank team has been running the crisis-ridden bank for months now.

“The bank will issue the bonus shares to maintain the prescribed level of paid-up capital. How much it will issue, this I cannot say exactly as it all depends upon the board, auditors, AGM and the approval of the NRB,”  said NCC Bank spokesperson Ramesh Raj Aryal.

NCC’s current paid-up capital stands at Rs 1.47 arba.

Siddhartha Bank has decided to pledge at least 10 percent bonus share to the shareholders from the net profit it posted in the last fiscal year to meet the paid-up capital requirement.

“We are planning to announce the bonus shares soon and plan to hold the AGM before Tihar,” a senior official with the bank told ShareSansar this afternoon.