Recapitalise Nepal Bank‚ says union
Wed, Jul 13, 2011 12:00 AM on Others,
KATHMANDU:
The employee union of Nepal Bank urged the government to facilitate recapitalisation of the bank in the next budget.
Nepal Bank Employees Union today forwarded three-point option to the government for recapitalising the bank’s capital that is not enough according to the regulations set by the central bank.
The bank has been going through Financial Sector Restructuring Programme since last 10 years, which has improved the bank’s performance but the bank’s core capital is still negative.
“Either the government can inject required deficit capital, or buy shares of the bank or provide loan to the bank,” said president of the union Nabaraj Rimal.
According to the union, if the government decides to buy shares and inject the deficit capital, then it can later auction the shares in the secondary market to divest.
The government can also choose to provide the required capital that is about Rs 1.7 billion as loan to the bank. “The loan can be repaid in two years with interest,” he said, floating an idea of government buying its shares so that paid up capital will be increased to Rs 2 billion.
The union also suggested raising the capital by selling the bank’s unproductive assets that could be converted into capital.
“Every year, the government mentions recapitalisation of Nepal Bank but it has been never realised,” Rimal said, adding that the deficit capital has adversely affected the bank’s performance hurting it competitiveness.
Source: THT
The employee union of Nepal Bank urged the government to facilitate recapitalisation of the bank in the next budget.
Nepal Bank Employees Union today forwarded three-point option to the government for recapitalising the bank’s capital that is not enough according to the regulations set by the central bank.
The bank has been going through Financial Sector Restructuring Programme since last 10 years, which has improved the bank’s performance but the bank’s core capital is still negative.
“Either the government can inject required deficit capital, or buy shares of the bank or provide loan to the bank,” said president of the union Nabaraj Rimal.
According to the union, if the government decides to buy shares and inject the deficit capital, then it can later auction the shares in the secondary market to divest.
The government can also choose to provide the required capital that is about Rs 1.7 billion as loan to the bank. “The loan can be repaid in two years with interest,” he said, floating an idea of government buying its shares so that paid up capital will be increased to Rs 2 billion.
The union also suggested raising the capital by selling the bank’s unproductive assets that could be converted into capital.
“Every year, the government mentions recapitalisation of Nepal Bank but it has been never realised,” Rimal said, adding that the deficit capital has adversely affected the bank’s performance hurting it competitiveness.
Source: THT
