NCHL gets NRB nod to clear rupee cheques
KATHMANDU, MAR 30 -
Nepal Rastra Bank (NRB) has given the go-ahead to Nepal Clearing House Limited (NCHL) to clear cheques in domestic currency too. NCHL was limited to clearing cheques in foreign currency until presently. The central bank’s board okayed the proposal on Wednesday.
After starting cheque clearance under the electronic system two months ago, NCHL has been only clearing foreign currency cheques in the first phase so that clearing of a limited number of cheques would give them experience to start clearance of Nepali currency cheques.
“We have received the central bank’s decision, and we will start clearing domestic currency cheques starting from next week,” said Neelesh Man Singh, chief executive officer of NCHL.
With NCHL currently clearing 200 foreign currency cheques daily, it expects it will have to manage clearing of more than 7,000 domestic currency cheques daily.
The electronic cheque clearing system was introduced to complete cheque clearing instantly as the manual system had been taking up to two days.
Meanwhile, the NRB board also decided to extend its management hold over the Nepal Bank Limited (NBL) for another year. The NBL management has remained under the central bank’s hold since 2001 and it had set the deadline of its exit in mid-April this year.
“As NBL is initiating the process of implementing its capital plan to turn itself into a healthy bank, the central bank decided to continue its management control over the country’s oldest bank,” said NRB spokesperson Bhaskarmani Gnawali. The NBL management is gearing up to issue 1:9.5 rights shares to raise its paid-up capital to Rs 4 billion from the existing Rs 380 million. If the rights shares are issued, each shareholder will have to invest 9.5 times his or her current stake to meet the target.
The government has a 41 percent stake while private sector promoters and the public hold the rest of the shares in the oldest bank. Under the capital plan, the government has to invest Rs 1.5 billion which it has agreed to do in principle. The bank is still facing a negative net worth of Rs 4.22 billion as the financial reforms programme implemented in 2002 failed to make it healthy despite significant achievements made in the area of automation and human resources. Its non-performing loans also declined to 5.17 percent from 60 percent a decade ago as a result of the reform measures.
However, its management says it still requires Rs 9.74 billion to turn it into a healthy bank.
Meanwhile, the central bank’s board has given a letter of intent for a merger between Butwal Finance and Alpic Everest Finance. Annapurna Finance was allowed to upgrade to a national level development bank. With the merger of Butwal and Alpic Everest, the paid-up capital of the new company will amount to Rs 316.86 million.
Annapurna has also already increased its paid-up capital to Rs 704.28 million to be eligible to become a national level development bank. A national level development bank needs to have a paid-up capital of Rs 640 million as per the licensing policy of the central bank.
Source: Kantipur
