Print Edition - 2016-02-29 | MONEY
Capital requirement hike for MFIs in offing
Move aimed at limiting the number of Micro Finance Institutions
Feb 29, 2016-Nepal Rastra Bank (NRB) Governor Chiranjeevi Nepal said on Sunday the central bank was preparing to hike the paid-up capital requirement for micro-finance institutions (MFIs).
The governor made the statement during the mid-term review of the monetary policy for this fiscal year here on Sunday. The central bank, through the monetary policy unveiled in July, had hiked the capital requirement for commercial banks, development banks and finance companies by four fold.Currently, national-level MFIs should maintain a paid-up capital of Rs100 million, while the capital requirement for regional MFIs is Rs60 million. It is Rs20 million for 4-10 districts-based MFIs, and Rs10 million for 1-3 district-based such institutions.
NRB Spokesperson Trilochan Pangeni said the central bank move was aimed at keeping the number of MFIs at “reasonable level”. Currently, there are 40 MFIs in the country, while the central bank has received more than 50 applications for new MFI licences, he said.
On BFI promoters’ complaints the two-year time given to them to meet the new capital requirements is “very short”, the governor said the central bank would not listen to any such complaints. “I am ready to prepone the deadline rather than extending it,” he said.
As per the central bank’s directive, commercial banks have to hike their paid-up capital to Rs8 billion from the current Rs2 billion. National-level development banks have to raise it to Rs2.5 billion from Rs640 million, and national-level finance companies have to increase their capital to Rs800 million from Rs200 million.
According to NRB, most of the commercial banks have proposed hiking their capital by issuing bonus and right’s shares, while development banks and finance companies have prioritised merger.
Published: 29-02-2016 09:06