Nepal Rastra Bank disapproves 40% dividend of Chhimek Laghubitta; Share price starts falling after NRB directs to maintain the fund ready for distribution as reserve

Nepal Rastra Bank has disapproved the proposed 40% dividend of Chhimek Laghubitta Bittiya Sanstha Limited (CBBL).

The microfinance company’s 212st BOD meeting had proposed 40% dividend including 18% bonus shares and 22% cash dividend for the FY 2074/75. The dividend was supposed to be distributed after approval from Nepal Rastra Bank and upcoming AGM of the company.

However, Rastra Bank has disapproved its proposition for dividend distribution and directed the company to maintain the fund separated for dividend distribution as reserve. The company has not mentioned the reason for the direction of Nepal Rastra Bank but it is sure to affect the shareholders.

This decision has come as a shock to the shareholders of the microfinance company as the effect is already being seen in its share price. As of 12:27 PM, the price of Chhimek Laghubitta stands at Rs 820, registering a fall of 38 points and which might increase till the end of the trading period.

The 52 week high price of CBBL stands at Rs 1,120 while the 52 week low remains at Rs 733.

It should also be noted that the stock of CBBL were being traded in a large volume in the recent days. For instance, starting from January 01, 18,888 units shares of the company were traded in 3 days.

And for the investors who bought the shares after considering the 40% dividend of the company willnow be facing a huge loss. The company’s price has already fallen by 4.43% within 2 hours of the trading period and with the decision of the Rastra Bank, it is likely to fall more.