Know how much commercial banks has to hike their capital to meet NRB’s capital requirement

- ShareSansar, July 31, 2017  on Exclusive , Featured , Financial Analysis , Latest , Stock Market

It is mandatory for all the commercial banks to hike their capital to Rs 8 arba as per the capital requirement policy of the Nepal Rastra Bank till the end of Ashad 2074, in which commercial banks can sum up the rights shares already proposed in the FY 2073/74 and bonus shares that will be distributed from free reserves and profit earned in the FY 2073/74. Till today, only 5 commercial banks including Rastriya Banijya Bank Limited (RBBL) had fulfilled their capital requirement. Other remaining commercial banks status of current paid up capital and amount of capital they need to hike and percentage of shortage of capital is analyzed in the below given table:

*(Amount in Rs ‘arba)

From the above table, it is concluded that leading commercial bank of Nepal, Standard Chartered Bank Nepal Limited (SCB) with only paid up capital of Rs 3.99 arba stood at the top of the table. SCB must increase its capital by 100.50% to meet the capital requirement. All the investors are in dilemma how it will increase its capital. As per the capital plan published by the SCB, it will provide bonus shares to meet the capital requirement as SCB has collected more than Rs 3.04 arba as premium from the FPO. SCB is followed by Everest Bank Limited (EBL) and Nabil Bank Limited (NABIL). They must hike their capital around 30% to meet the capital requirement.

Similarly, Commercial Bank Limited (CCBL) who has recently started its joint operation after successful acquisition of Sagarmatha Finance Limited (SAFL) will be acquiring Seti Finance Limited (SETI) and Alpine Development Bank Limited (ALDBL) to meet the capital of Rs 8 arba.

Likewise, Kumari Bank Limited (KBL) has to hike its capital by 11.89%. Its paid up capital only stands at Rs 5.96 arba after acquiring Kasthamandap Development Bank Limited (KDBL), Mahakali Bikas Bank Limited (MBBL), Kankrebihar Bikas Bank Limited (KKBL) and Paschimanchal Finance Company Limited (PFC). But KBL had already announce nearly 20% right shares worth Rs 1.19 arba to its shareholders from the 16th AGM held on Chaitra, 2073.

After adjustment of 13.25% bonus shares and 25% right shares, Mega Bank Nepal Limited has paid up capital of Rs 4.59 arba. Further, MEGA will be issuing 65% right shares to its shareholders to hike capital to Rs 7.56 arba. Further, MEGA is under the process of merger with Tourism Development Bank Limited (TDBL).

Global IME Bank Limited (GBIME), Nepal Bank Limited (NBL) and Nepal Investment Bank Limited (NIB) had already fulfilled capital requirement. Also Prabhu Bank Limited (PRVU) will be issuing 40% right shares to meet capital requirement and bank is waiting for approval from SEBON. Rastriya Banijya Bank Limited (RBB) is the only unlisted commercial bank whose paid up capital stands at Rs 8.58 arba.

  • Sijan Bajracharya