August 12: Nepal Rastra Bank governor Chiranjeevi Nepal unveiled the central bank’s monetary policy on July 23. Nepal, who took office on March 20, has given continuity to most of the bank’s key rates, and due consideration to the effects of the April earthquake.

But the highlight of the policy is that commercial banks need to increase their paid-up capital by as much as four folds by 2017/18. According to the new policy, commercial banks need to increase their capital to Rs 8 billion, and national-level development banks to Rs 2.5 billion. Similarly, development banks that cover 4-10 districts need to increase their capital to 1.2 billion, and financial institutions that cover 1-3 districts need to have at least Rs 400 million. The policy has been introduced to encourage banks to merge with one another, said the governor in his speech.  BFIs have also been asked to keep aside a certain portion of profit to train human resources and fulfill corporate social responsibility.

The biggest private sector bank, in terms of capital, is Global IME Bank (with Rs 5.01 billion in paid-up capital), the smallest is NCC (with Rs 1.47 billion). Rastriya Banijya Bank and Agriculture Development Bank are the only banks that have the paid-up capital in excess of Rs 8 billion.