NRB Amends the Integrated Guidelines, 2078; Removes the 30% Limit for Microfinance's Dividend Distribution

The 30 percent ceiling (maximum limit) imposed on microfinance dividend distributions has been lifted by Nepal Rastra Bank (NRB). The NRB eliminated the prior cap of a 30% cash dividend and revised the Integrated Guidelines, 2078, issued to Microfinance Institutions on Monday, Mangsir, 12.

The ability to distribute cash dividends exceeding 30% of distributable profit was previously unavailable to microfinance financial organizations. The amended regulation, however, stipulates that microfinance financial institutions that desire to distribute an annual dividend (cash or bonus) of more than 20% must deposit an amount equal to 50% of that dividend in the general reserve fund.