Rastriya Banijya Bank extends application deadline

Rastriya Banijya Bank has extended the deadline – for the third time – for filing applications to purchase its shares in Nepal Investment Bank and Nepal Housing Finance Company until mid-March 2014 making the criterion more flexible.

The state-owned bank has also adopted flexibility in terms of criteria for buyers against its earlier decision of selling the shares to a single highest bidder. It has fixed Rs 594 a unit for Nepal Investment Bank and Rs 101 a unit for Nepal Housing Finance Company stocks. The bidders are required to first deposit 10 per cent of the quoted amount.

The wholly government owned bank is ready to sell its stocks to different bidders, also against its previous criteria to sell to single or a number of firms jointly. "However, one bidder has to buy up to 10 per cent of the total shares," it said, adding that it has 5,652,016 units of shares in Nepal Investment Bank (15 per cent) and 196,027 units of shares in Nepal Housing Finance Company.

Earlier the bank had issued the first auction notice on December 11 with a month to mid-January deadline and again extended to mid-February, after the central bank prevented Rastriya Banijya Bank from distributing dividend due to cross-holding in other banks and financial institution.

The bank has also not been able to receive Rs 140 million cash dividend – from the Nepal Investment Bank that had approved 10 per cent bonus shares and 25 per cent cash dividend in its recent annual general meeting – due to the central bank’s restriction. The dividends would be released after Rastriya Banijya Bank sells its shares in the two banks and financial institutions.