NRB finds source of major headache in 5 commercial banks; hard axe expected to fall upon the banks soon

Out of 28 commercial banks, 5 of them have been a source of major headache for the Nepal Rastra Bank. it has been reported that series of serious discussion have taken place recently in the board of banking regulator regarding the proper punitive action it should take against 5 banks namely Bank of Kathmandu, Kumari Bank, Civil Bank, NCC Bank and NMB Bank which haven’t yet met the central bank’s direction to meet minimum paid up capital of Rs 8 arba. It should be noted that the central bank has not yet permitted these 5 institutions to convene their AGM for the FY 2074-75 citing the same reason.

Moreover, in a more serious note, 3 commercial banks namely Civil, Kumari and NCC which are facing problems to raise money from its promoters during right issuance can soon expect Rastra Bank’s axe to fall upon them as it has been quite a long that these 3 institutions have been dilly-dallying on their promoter’s shares.

The central bank has also expressed its dissatisfaction in the relatively long time the FPO issuance of NMB bank is taking place. After the issuance of FPO shares, the bank would easily meet the Rs 8 arba paid up capital mark which currently seems a far cry because the proposed FPO price is reportedly under fire from the share underwriter. In addition, the banking regulator is also taking a dig against Bank of Kathmandu which wants to convert its premium amount that it managed to collect while auctioning promoter shares earlier as paid up capital where NRB has firmly held that the premium amount can only be added to the reserve of the bank not to the paid up capital.