Monday, April 1, 2013

Central Bank to continue managing Nepal Bank for nine more months

The central bank today decided to continue managing Nepal Bank for nine more months.
Though, Nepal Rastra Bank was supposed to call back its management team — currently led by Maheshwor Lal Shrestha — from April 16, a board meeting today has decided to extend the tenure of its management for nine months as the first commercial bank has been increasing its paid up capital by issuing rights shares and selling of fixed assets that it has been planned long, according to a central bank source.
The central bank has been involved in the management of Nepal Bank directly after the foreign management team — under the Financial Sector Reform Programme — returned.
Earlier, Nepal Rastra Bank had sent a team led by Binod Atreya to manage Nepal Bank. It has again sent its team led by Shrestha three years ago to manage the Nepal Bank in April, 2010.
Nepal Bank has recently re-listed its shares at Nepal Stock Exchange (Nepse) in order to carry out its recapitalisation plan. According to the plan to increase the its paid up capital to Rs 4 billion, the bank is raising funds worth Rs 3.62 billion by issuing rights shares.
The government holds 41 per cent stake in the bank while 50 per cent is owned by public shareholders and the remaining belong to different financial institutions. Of the 50 per cent owned by public shareholders, half belongs to minority shareholders and the other half is owned by some of the large industrial groups.
Nepse had de-listed Nepal Bank in 2004 due to the bank’s near insolvency state, prompting a decade-long Financial Sector Reform Programme that was started in 2002.

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