RBB proposes major overhaul; hopes to raise adequacy ratio to 10.17 in five years; Special General Meeting on Asar 29

ShareSansar, June 28

In order to change the bank’s capital structure, Rastriya Banijya Bank has set amendment to the bank’s MoU and articles of association as the main agendas for its upcoming special general meeting on Asar 29. The meeting will be held at the bank’s central office in Singhadurbar Plaza, Kathmandu.

The bank has sent a proposal to the Finance Ministry seeking approval for its plan that is aimed at providing Rs 3 arba cash dividend to the government by maintaining a capital adequacy ratio of 10 percent over the next five years. The bank has said in the proposal that it plans to raise its adequacy ratio to 10.17 percent by FY 2073/74.  

The bank hopes to achieve the target at the end of the fourth year through internal revenue generated each year. The bank plans to meet the goal mainly through profit and asset selling.

The bank has said that its capital adequacy ratio would reach 2.37 percent within the ongoing fiscal.  As per the rule set by Nepal Rastra Bank, commercial banks must have an adequacy ratio of 10 percent and in order to be eligible to distribute dividends, the ratio must be 11 percent.

After the bank’s condition worsened, the government recently provided it with Rs 4.32 arab. The bank, whose capital base was negative by 23 percent before the government came to its aid, now has a paid-up capital of Rs 8 arba 43 crore.