Money Matters News In Brief (22-28 July 2013)

Special Meeting Okays RBB Share Conversion 

The special general meeting (SGM) of Rastriya Banijya Bank (RBB) on Sunday, July 14 approved the conversion of 8,735,700 units of preference shares worth Rs 873.57 million into ordinary shares. With the conversion, RBB’s paid-up capital has reached Rs 8.58 billion. 

 

The SGM approved the capital restructuring through an amendment to the bank’s MoA and AoA as proposed by RBB Chairman Narahari Dhakal. After this, the bank’s capital adequacy ratio stands at 3 percent for the first time as of mid-July, which is still far below the minimum requirement of 10% set by Nepal Rastra Bank. The bank had planned to increase its core capital to Rs 8.5 billion in its capital plan which has now been attained. The government had earlier injected Rs 4.32 billion in the bank to increase its paid-up capital. 

 

The bank had received the Nepal Rastra Bank (NRB) approval for its three-year capital plan in mid-April last year. However, the bank’s proposed Rs 12.5 billion capital plan will not be enough to meet capital adequacy which require Rs 14 billion. Earlier, the government had directed RBB and NIDC Development Bank to merge in order to manage the necessary capital. However, the merger has not taken place particularly due to NIDC’s reluctance. 

 

Announcing the government budget for the fiscal year 2013-14, the Finance Minister has announced a plan to upgrade NIDC Development bank to an Infrastructure Development Bank. 

 

NLG Shares Listed 

NLG Insurance Company Limited and Nepse signed an agreement on July 9 to list 2,250,000 units of ordinary shares of NLG. Trading in those shares in the secondary market started on 16 July 2013. These shares were issued as IPO in 29 March 2013.