Sanima Bikas Bank and Annapurna Finance get central bank’s upgradation nod

KATHMANDU, OCT 26 -

Nepal Rastra Bank (NRB) has given its nod for the upgradation of Sanima Bikas Bank into a commercial bank. The NRB board meeting on Tuesday agreed in principle to upgrade Sanima as the country’s 32nd commercial bank.

The central bank board also gave its green signal to Annapurna Finance Company’s upgradation into a development bank and merger between Infrastructure Development Bank and Swastik Merchant Finance Company.

Promoted by Non-Resident Nepalis (NRNs), Sanima had applied at NRB for the upgradation one-and-a-half years ago. With the central bank keeping moratorium on bank licence issuance, the approval took a little bit longer to come. The bank, after applying for upgradtion, increased its paid-up capital to Rs 2.01 billion from Rs 800 million issuing 1:15 rights shares.

Sanima Chief Executive Officer (CEO) Kumar Lamsal said the bank is in a sound financial health with a non-performing asset (NPA) level of 0.004 percent. After upgradtion, Sanima plans to expand its outreach to rural areas. “We do not have our presence in the far western region.” said Lamsal. “We will make sure that we leave a footprint in that region too.”

Lamsal, however, said they will not be going for massive expansion and will only consider organic growth, adding that the bank will also start its business in trade and finance as it was unable to do so in the past due to its development bank status.

Annapurna Finance Company had also raised its paid-up capital to upgrade itself as development bank. The finance company increased the capital to Rs 704 million from Rs 260 million issuing 1:2.6 rights shares and 13 percent bonus shares. Annapurna CEO Krishna Raj Lamichhane said NRB gave them the green signal for upgradtion after carrying out detailed supervision.

The finance company currently has deposits of Rs 3.53 billion, lending worth 3.35 billion and 1.86 percent NPA level.

The bank also plans to change its name as another bank named Annapurna Development Bank already exists. “Our annual general meeting to be held in November will decide new name.” said Lamichhane. “The company will also comply with BASEL II, a mandatory requirement for development bank.”

With the central bank nod, the merger between International Development Bank and Swastik Merchant Finance Company is also expected to gain momentum. The institutions had signed a Memorandum of Understanding regarding the merger in August, and were waiting for the central bank’s approval to initiate the process.

While Infrastructure Development Bank is a national level development bank with a paid-up capital of Rs 660 million, Swastik is a national level finance company with paid-up capital of Rs 100 million.

Source: Kantipur