The central
bank has decided to continue running Nepal Bank for another six months till the
end of the current fiscal year.
The board
meeting of the central bank today decided to continue its management team at
the oldest bank of the country as some of its responsibility has yet to be
completed like increasing capital adequacy ratio (CAR). The central bank has
planned to increase CAR to over 10 per cent – that is mandatory regulatory
requirement – by selling some Rs 2 billion worth assets. The CAR is used to
protect depositors and promote the stability and efficiency of financial
systems around the world.
Two types of capital are measured: tier one capital, which can absorb losses without a bank being required to cease trading, and tier two capital, which can absorb losses in the event of a winding-up and so provides a lesser degree of protection to depositors. Thus, the higher the CAR, the stronger the financial institution is.
Two types of capital are measured: tier one capital, which can absorb losses without a bank being required to cease trading, and tier two capital, which can absorb losses in the event of a winding-up and so provides a lesser degree of protection to depositors. Thus, the higher the CAR, the stronger the financial institution is.
The central
bank, had six months ago, also decided to continue take over until mid-January
for the reforms including increase in paid up capital and selling of some of
its assets. Though the bank has already increased its paid up capital, it is
yet to sell assets, which has forced the central bank to continue its hold in
the bank.
Nepal Bank –
that has recently increased its paid up capital to over Rs 3.96 billion from
earlier Rs 380 million only – is a listed commercial bank at the Nepal Stock
Exchange (Nepse). The bank's shares have been traded at Rs 380 today. The
public has 49.94 per cent shares in the bank. Today also the bank saw its bulk
shares changing hands as Nirmal Pradhan, one of the big time investors, sold
some 1.1 million units of shares at Rs 410 million, whereas Shiva Bikram Land
and Industry promoted by entrepreneur Rabi Bhakta Shrestha bought the bulk
units of shares.
Currently, a team led by
the central bank director Maheshwor Lal Shrestha is handling the bank that was
once under the financial sector reform programme, which most of the experts
failed to reform the oldest financial institution of the country.
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