More than half a dozen commercial banks have hiked home loan rates by as much as 1.5 percentage points - a move which will disappoint borrowers deeply, citing increase in cost of capital. Banks like NMB Bank, Global Bank, Nepal Industrial and Commercial (NIC) Bank and KIST Bank have enforced the new rates from the new fiscal year, starting from Sunday this week. Following the change, NIC Bank´s home loans rate has jumped to as high as 16.49 percent. Similarly, rate of NMB Bank also stands at over 16 percent, while that of KIST Bank has gone up to the range of 14 to 16 percent.
The fresh hike has also jacked up the industry average rate of home loans to just over 16 percent. So far, the industry average rate was over 15 percent. "We had to raise the rates mainly because the central bank´s directives sought us to close the interest rate gap between different savings schemes to 2 percent or less. This raised our cost of capital," said Upendra Paudel, chief executive of NMB Bank. The central bank has asked the banks and financial institutions to bridge the gap in rate between different savings products, mainly as bankers, while luring fresh deposits, offered higher rates to new depositors only, leaving old accounts holders deprived of due interest return.
Banks were offering as high as 10 percent interest return to new depositors, whereas older depositors were offered as low as 3 percent. "This is not fair. The banks must bridge the gap to 2 percent or less," NRB had said in its directives. Though a few banks had instantly complied with the directives, most of the BFIs are just gearing up to implement it. As a result, sources told Republica that more banks may follow the suit and raise lending rates because they are ´left with no choice´ as they have raised the rate of minimal interest rate to bridge the gap.
"As liquidity problem has not faded away in a large number of banks, they cannot lower the higher rates. And the unwanted raise of lower savings rate has gone up to increase cost of capital," said the source. Interestingly, the latest hike in lending rate has come contrary to what Nepal Bankers´ Association (NBA) had announced about a month ago. With the ease in liquidity in leading banks, NBA had said they have lowered the interest return to corporate clients by as much as a percentage point. "We believe this will eventually lead to drop in lending rates," NBA president Ashok Rana had told Republica then.
Source:
myrepublica
Monday, July 25, 2011
Commercial banks raise home loans rate
Monday, February 14, 2011
5% Cash Dividend of Annapurna Bikas Bank
The BOD meeting of the Annapurna Bikas Bank Ltd company dated 2067/10/24 has decided to give 5% cash dividend subject to approval from NRB.
Source:
nepalstock.com
Nepal Rastra Bank to amending gold guideline
The Nepal Rastra Bank (NRB) is preparing to recommend the Ministry of Commerce and Supplies to review the guideline on gold and silver management. The revision is targeted at simplifying the existing gold distribution provision. The guideline introduced on Dec. 27, 2010 has allowed commercial banks to import 15 kg of gold per day and release it in the domestic market.
However, only few traders approached to designated commercial banks to buy gold. After the implementation of the guideline, three commercial banks have imported 150 kg of gold so far. Of the quantity, only 60 kg has been procured by traders. "We will soon recommend the Ministry of Commerce and Supplies to review the guideline," said Chinta Mani Shiwakoti, director at the Foreign Exchange Department of NRB. He said the NRB will soon hold a meeting with ministry officials in this regard.
Recently, the NRB had held a discussion with traders and bankers regarding import of the yellow metal and its distribution in the market. In the meeting, traders had strongly demanded revision of the guideline, saying it was `impractical'. It has been more than a month since the government implemented the new guideline. However, only 2-4 kg of gold is sold from banks per day. Currently, the gold demand is around is 25-30 kg per day and gold imported illegally from India fulfills a large portion of the demand.
Tej Ranta Shakya, president of Nepal Gold and Silver Dealers Association, said although gold brought from India is expensive by some Rs 300 per 10 gm, traders opt for Indian gold as there are no hassles in acquiring it. "Over the last month, we only recommended for 15 kg of gold," he added. A total of 16 commercial banks are listed by the Nepal Bankers' Association to import gold. With low response from traders, only three banks¿NIC, Bank of Kathmandu and Laxmi¿have imported 50 kg of gold each as of Feb. 8.
"Demand from traders is low," said Saroj Guragain, head of the Financial Market and Commodities division of NIC Bank. He said traders are reluctant to procure the yellow metal from banks. Due to low sales, banks are also facing the burden of increasing holding cost of gold. Therefore, many banks are not interested in importing gold. As per the guideline, commercial banks can sell 1 kg of gold at a time. But traders said small traders are finding it difficult as their requirements are low. The provision to submit the details of at least 50 percent of gold bought earlier to buy new gold is also not practical, they said.
"The guideline was targeted for small traders. However, from the looks of things, it has only helped big traders," said Shakya. He said the government should make a provision that allows banks to sell gold to wholesalers too, so that they could distribute gold to small traders.
Source:
myrepublica
Tuesday, February 8, 2011
Nepal Rastra Bank to liquidate Samjhana Finance
Nepal Rastra Bank (NRB) on Monday decided to send Samjhana Finance Company (SFC) into liquidation and declared United Development Bank (UDB) a ´troubled bank´. The central bank has also asked the management of SFC to furnish clarification within 15 days. SFC, which has mobilized deposits of Rs 180 million from general public, has a total liability of Rs 640 million. "The NRB board meeting took the decision, keeping in view the financial position and management status of the two financial institutions," an NRB official told Republica. The financially ailing SFC has mobilized Rs 20 million in deposits from the Army Welfare Fund operated by the Nepal Army. It has an outstanding loan worth Rs 210 million and its non-banking assets have been calculated at Rs 300 million. Headquartered in Banepa of Kavre district, SFC has two branches in Lalitpur and Kamalakshi of Kathmandu.
Saroj Bajracharya, manager of SFC´s Lalitpur branch, is in police custody for investigation, as most of the non-performing loans of SFC have been found issued by the branch. Bijay Mani Acharya, manager of SFC´s Kamalakshi branch, has left for greener pastures abroad after tendering resignation. Sources say the company is facing difficulty in preparing financial statement in the absence of experience manpower. The company has been found operating financial transactions through fake accounting statement after NRB, a year ago, directed it not to mobilize deposits and issue loans.
The central bank initiated investigation against the bank after depositors, whose money the company had deposited into fake accounts, asked the management to return their deposits. Though NRB has decided to send the company into liquidation, deposits of general public are not at risk as the collaterals pledged against loans issued are under its possession. The company has around 5,000 depositors.
The company managed to recover loans worth Rs 70 million over the past six months and returned the amount to depositors. NRB had declared Samjahana Finance a ´troubled´ financial institution about a year ago on the basis of its weak capital base and high non-performing asset (NPA).
Source:
myrepublica
Sunday, February 6, 2011
Number of blacklisted loan defaulters on rises
The number of blacklisted bank loan defaulters has begun to rise again after a three-year declining trend. The number started to rise from the second half of the last fiscal year after a new Nepal Rastra Bank (NRB) directive allowed Banks and Financial Institutions (BFIs) to include defaulters in the blacklist irrespective of loan amount, provided that they meet the basic inclusion criteria. Although this is an alternative provision, defaults of loans worth more than Rs 2.5 million should be compulsorily blacklisted.
How the number of blacklisted firms and individuals is peaking is evident from the fact that a total of 156 names were blacklisted as of Jan. 26 of the current fiscal year compared to 171 in the entire last fiscal year, according to the Credit Information Bureau (CIB) which keeps records of those blacklisted by BFIs. Since fiscal year 2006-07, the number of blacklisted firms and individuals had been falling until fiscal year 2008-09. "After the new NRB provision, the number of blacklisted firms and individuals started to go up," said Anil Chandra Adhikari, chief executive officer of CIB.
Among the major firms blacklisted over the last six months are Cosmic Air, Avco International, Memento Apparels, Mount Everest Brewery and Triveni Cement. No BFI can lend to a blacklisted firm or an individual. Not even the remaining installments of loan, says the NRB directive. The government can also cancel passports of blacklisted individuals as per the recommendation of BFIs. According to the NRB directive, banks may blacklist individuals or firms in the event of cheque bouncing and write-offs. "These kinds of additional provisions have resulted in increase in the number of blacklisted defaulters in FY 2009-10," states CIB's annual report.
BFIs should blacklist any firms or individuals if their cheques bounced for three consecutive times. The NRB directive has also provisioned that BFIs should blacklist those involved in fraud¿use of counterfeit cheques, drafts, debit and credit cards and bills. Those not repaying credit card debts should also be blacklisted. However Adhikari of CIB said the NRB provision that BFIs could blacklist defaulters of loans worth below Rs 2.5 million only after blacklisting defaulters of loans worth more than the amount has created confusion. As of FY 2009-10, there were a total of 2,152 blacklisted defaulters with total outstanding amount of Rs 29.81 billion.
Sudhir Khatri, chief executive officer of DCBL Bank, said it was natural to see rise in the number of blacklisted defaulters given the increased number of BFIs. "Current political and economic situation of the country also resulted in increased loan defaults," he added. During the first quarter of the current fiscal year non-performing loans of commercial banks went up by Rs 2.93 billion. The NPL level rose by 0.61 percent to 3.15 percent. "The default rate will further go up with stagnation in the real estate sector, and industrial sector facing acute power outrage and higher interest rate," said Khatri. Bankers say that that there has not been 100 percent payment of interest too in recent days. Not only the number of blacklisted defaulters, number of new borrowers also increased by more than 25% in FY 2009-10 compared to the previous year, as per the record of CIB.
Source:
ekantipur
Nepal Rastra Bank no to mutual fund operations
An effort of two commercial banks to establish a mutual fund has hit a snag after the central bank refused to permit them to jump into the business, stating that Bank and Financial Institutions Act (BAFIA) does not include mutual fund operations as areas of activities for the banks. Nabil Bank and Kumari Bank had recently sought permission from the central bank to set up mutual fund. "We had to say no to them because BAFIA, the law governing banks and financial institutions that defines areas of operations, lacks ´mutual fund´ in the list of activities that the banks can venture into," said a source at the Nepal Rastra Bank (NRB).
NRB´s denial, meanwhile, has almost closed the new investment avenue for small investors, because capital base and other requisites provisioned in the existing Regulations on Mutual Fund make only the commercial banks eligible to kick-start the business. According to Mutual Fund Regulations enacted a year ago, any corporate entity interested to establish a mutual fund must have a minimum paid-up capital of Rs 1 billion. Apart from that, the interested institution must also have completed five years of operations, earned profit for last three consecutive years and have paid-up capital not less than its net worth.
"Clearly, only commercial banks are eligible institutions to establish mutual fund. We are surprised over the central bank´s denial to let the banks jump into the business," a senior official of Securities Board of Nepal (Sebon) said, preferring anonymity. The official even argued that BAFIA was not a hindrance, because the act also has a clause whereby the central bank can authorize banks and financial institutions to undertake financial activities, even if it is not clearly stated in the law. "It´s just a matter of will. There are ample examples of banks operating mutual funds all round the world," the official added. NRB officials, however, said that they were not negative toward banks venturing into mutual fund operations. "It is just that we need policy clearance. Once we get that, we will readily allow banks to set up mutual fund," said the NRB official.
Sebon in recent years had pushed for mutual fund -- an instrument of collective investment in which money from a large number of investors is pooled -- in a bid to widen the capital market and also to pledge additional investment opportunities to the small investors. The pool is managed professionally and investment is made in securities, like stocks, bonds and short-term money market instruments among others. Typically, the fund manager buys and sells the fund´s investments in accordance with the fund´s investment objective. Sebon - the stock market regulator -- is entrusted with the responsibility of overseeing the operations of the manager, ensuring that it is managing the fund appropriately in the best interests of the investors.
Source:
myrepublica
IPOs worth Rs 580m okayed this FY
The combined value of initial public offerings (IPOs) made during the first six months of the current fiscal year was up significantly compared to 2009-10 despite a fall in the number of issuing companies. The Securities Board of Nepal (SEBON) gave its nod to nine companies to make IPOs amounting to Rs 580.03 million during the review period compared to 11 companies permitted to make IPOs worth Rs 395.40 million in the previous fiscal.
According to the stock market regulator, two finance companies, five development banks, one hydropower company and one insurance company received SEBON's go-ahead to IPO during the first half of this fiscal year. Among the nine companies getting SEBON's approval, Gurans Life Insurance Company made the largest IPO of 1.08 million shares.
Meanwhile, the value of rights shares approved was half that of 2009-10. SEBON okayed the issue of rights shares by 16 companies worth Rs 3.37 billion against Rs 6.13 billion previously. Nine finance companies, four development banks, two commercial banks and one insurance company were cleared to issue rights shares in the first six months of this year. Sanima Bikas Bank's rights issue was the largest among the development banks. Dhruba Timilsina, corporate finance department chief at SEBON, said that the supply of shares in the capital market had surged after Nepal Rastra Bank instructed BFIs to increase their paid-up capital by 2012-13.
Source:
ekantipur
Friday, January 7, 2011
Bankers brief PM on liquidity scene
Leading bankers of the country today met caretaker Prime Minister Madhav Kumar Nepal and informed him about problems being faced by the banking sector including liquidity crunch and their investments in the crusher industry. The commercial banks are currently facing liquidity crunch due to a delayed budget coupled with diversion of deposits to other financial institutions offering higher interest rates. According to the central bank, in the first four months of current fiscal year (mid-November), total government spending increased by only 1.8 per cent to Rs 51.54 billion, compared to an increase of 36.5 per cent in the same period last year, creating tight liquidity situation in the market.
Nepal Rastra Bank (NRB) data reveals that the deposits, which stood at around Rs 620 billion in mid-July 2010, is currently at around Rs 623 billion. The government spending has dropped squeezing the liquidity in the market due to a delayed budget. The government spending creates ease of liquidity in the market as the money pumped in by the government attracts private sector money too.
Due to liquidity crunch, the Credit to Deposit (CD) ratio of commercial banks has also gone up from the central bank-fixed ratio of 85 per cent. Not only the much-delayed budget but also the higher interest rates offered by finance companies and cooperatives ¿ that are offering over 15 per cent interest ¿ have squeezed liquidity from the commercial banks.
According to the central bank, the deposit mobilisation of commercial banks has declined by Rs 4.5 billion during the first four months of 2010-11 against a growth of Rs 19 billion in the same period last year. The central bank attributed the decline in deposit mobilisation by commercial banks to the diversion of deposits to other financial institutions on account of higher interest rate offered by them. The bankers also requested the Prime Minister to bring a clear policy about the crusher industry. "Commercial banks have given Rs 6 billion in loans to the crusher industry. The total loan is at Rs 10 billion if lending from other financial institutions is included, said president of Nepal Bankers Association (NBA) Sashin Joshi.
Source:
tht
Commercial banks in Pokhara losing deposits
As the development banks and other financial institutions are introducing different schemes, including high interest rates, to lure clients, deposits in the commercial banks have declined, according to the bankers. "The deposit in our bank has gone down by some 30 pc recently," said a banker, "If the unhealthy competition like this continues, the problem can be even bigger." He told Republica that commercial banks have been seeing drop in deposits collections after development banks and began increasing their interest rates after the liquidity crunch hit banking sector last year. At present, banks under ´B´ category (development banks) have been attracting more deposits than the ´A´ category banks (commercial banks).
Deposit collected by commercial banks is only 49.17 percent of the total deposit collection till mid-October of the current fiscal year. Commercial banks had collected 55.88 percent of the total deposit during the same period last year. According to Nepal Rastra Bank´s Pokhara regional office, commercial banks have lost deposits by some 7 percent over the period of a year. Development banks and financial institutions, however, raised their deposits by 6 percent and 1 percent respectively during the period.
Development banks and financial institutions have been aggressively expanding their network in Pokhara in recent years. Thirteen development banks and 14 finance companies have opened their branch in Pokhara in the last one year. Only six commercial banks opened their branches in Pokhara during the period. The bankers said commercial banks have been losing deposit because of their failure to compete with development banks and financial institutions by involving in unhealthy practices like raising interest rates and offering discounts to clients in account operation and loan flow.
According to Nepal Rastra Bank, deposit collection of development banks till mid-October in the last fiscal year was 23 pc of the total deposit collection. This has climbed to 29 pc during the same period in the current fiscal year. Similarly, financial institutions have also managed to increase their deposits to 21 percent of the total deposit collection. Banks and financial institutions in Pokhara have mobilized Rs 39.04 billion in deposits till mid-October of the current fiscal year.
Source:
myrepublica
Thursday, November 11, 2010
NRB warns money changers of nixing license
Nepal Rastra Bank (NRB) has warned of cancelling the licenses of 100 companies involved in foreign exchange transactions for failing to show their paid up capital status and not serving customers as per the Foreign Exchange Regulation Act. The central bank warned the money changer companies, cargo companies, travel agencies and hotels and has set a deadline to fulfill their obligation on time. It found in a recent study of 200 companies involved in foreign exchange transaction that most of them do not have the amount of paid up capital that they had mentioned while registering themselves.
"We have given them a three-to-six months deadline to correct their deficiencies," said a senior NRB official. "Their licenses will be cancelled automatically if they fail to fulfil their obligation." Apart from unclear paid up capital status, the companies not displaying the exchange rate publicly, failing to ensure adequate security measures and not giving receipt while changing foreign currency have also been warned. The central bank can cancel the license as an extreme penalty, ranging from issuing warning notice if any company involved in foreign exchange transactions violates the Act.
The paid-up capital of a company is one of the main bases that the central bank considers before issuing a license to deal in foreign exchange. All companies, including banks and financial institutions are required to obtain a separate license from the central bank to conduct foreign exchange transactions. These companies given warning had shown paid up capital ranging from Rs. 1 million to Rs. 500 million on paper. Even the big hotels failed to show their paid up capital status, according to NRB officials. Banks and financial institutions examine the paid up capital of a company before loaning it money. If a company is liquidated, its liabilities are covered from the paid up capital.
The central bank's finding also indicates that many companies registered with the Office of the Company Registrar (OCR) might have no real paid up capital. OCR deputy registrar Laxman Takur said that he was unaware of the findings of the central bank. "We register the company related to foreign exchange transactions such as money changers and money transfer companies only after getting the opinion of the central bank,' he said. According to OCR, it has been registering the companies after getting clearance of paid up capital by auditors. "There is, however, no compulsion for private companies to produce evidence," said Thakur.
Source:
ekantipur
Saturday, September 18, 2010
Central bank to cut down circulation of new bank notes this Dashain
Nepal Rastra Bank (NRB) has said that it will sharply cut-down the issuance of fresh banknotes during the Dashain festival, as rate of notes damage remains very high during the festive season. Said an NRB official, the central bank was planning to fulfill the currency demand through a combination of new notes and notes in circulation in equal proportion. "However, we assure that the previously used notes to be issued will be very clean and as good as new notes," said NRB spokesperson Gopal Kafle, assuring that it will not dissatisfy the customers habituated to using new notes during the Dashain festival.
In the past, the central bank used to fulfill demand of different denominations, particularly smaller ones, by circulating freshly printed notes. But the bank decided to break the tradition practice as 80 percent of the new notes issued during Dashain are spoiled so badly that those notes cannot be reissued in the market. According to NRB, the normal life of Nepali paper money has a specific time span of 1.5 years. However, a large chuck of them becomes unusable within a year due to users´ mishandling. And notes freshly issued in Dashain cannot be reissued after three months.
"This is unwanted loss, which has unwanted cost attached," said an official at NRB Currency Management Division. Given that the cost is eventually met with taxpayers´ money, he argued it was meaningless having to shoulder the unnecessary cost when the clean notes can serve the purpose. Moreover, the central bank has assured that people who reeled under short supply of notes and were forced to curtail consumption during Dashain last year will witness affairs in the market completely different this festive season.
Officials at the central bank said it presently has Rs 97 billion worth of fresh notes in its inventory, whereas, it estimates the demand for fresh notes stands at around Rs 25 billion during the festive season. "Our inventory is strong and stands multifold of demand we expect to witness this season. People will not face notes crunch this year," said NRB Governor Dr Yuva Raj Khadiwada. Last year, the central bank had failed to pump out enough notes in the market during the festival, when consumption shot up dramatically, creating short supply of money in the system.
While that had created severe inconvenience, general customers were forced to cut-down consumption and their confidence in the banking system had eroded. According to an estimate, the consumption during Dashain this year will jump well over Rs 50 billion surpassing the earlier record. As the existing notes in circulation will fulfil the major chunk of people´s needs, NRB anticipates its preparedness to pump out Rs 25 billion will keep the business in normal state.
The central bank has said it has already issued enough cash to its seven offices located in Pokhara, Siddharthanagar, Janakpur, Biratnagar, Birgunj, Nepalgunj and Dhangadi to manage notes demand in different parts of the country.
Source:
myrepublica
Friday, September 17, 2010
Announcements
Ordinary Share Allotment: Himalaya Finance Ltd has allotted its ordinary share to 25220 applicants on 15 September 2010 (2067 Bhadra 30) which is based on following model. 4th Quarter Financial Report & Company Analysis (2066/67): Everest Insurance Co. Ltd Everest Insurance Co. Ltd has published financial reports and company analysis during the fourth quarter of fiscal year 2066/67. Press Release: NIDC Capital Markets (NCM) NIDC Capital Markets has issued press release regarding the ordinary share allotment of Valley Finance Ltd on 15 Sep, 2010 (2067 Bhadra 30). Ordinary Share Allotment: Valley Finance Valley Finance Ltd has allotted its ordinary share to 51407 applicants on 15 September 2010 (2067 Bhadra 30) which is based on following model. More Details Treasury Bill Issue: Nepal Rastra Bank (NRB) Nepal Rastra Bank is issuing 28 days Treasury bill, 91 days Treasury bill, 182 days T-bill and 364 day T-bill on 21 September 2010. The bid quotation are to be submitted by 20 September, 2010 (2067 Ashwin 5).
Monday, June 7, 2010
OTC market yet to open account
| In the Nepal Stock Exchange (Nepse), thousands of shares are traded daily, but the Over-The-Counter (OTC) market has yet not seen any trading till date. Similar is the fate of government and corporate bonds. OTC being an unorganised secondary market, it does not require the involvement of brokers. Thus in Nepal, Nepse facilitates the transfer of the rights of such OTC shares. The shares of companies that have been de-listed by Nepse, the share of small companies which are unable to meet Nepse's and its regulator SEBON's requirements, and the shares of banks and financial institutions (BFIs) which have issued their initial public offering (IPO) but not yet listed at the Nepse, can be traded over the counter. The shares of the companies, which were de-listed from secondary market, Nepse and are not fulfilling the criteria of Nepse, SEBON, Nepal Rastra Bank NRB and Insurance Board (IB) can be traded as OTC shares. Nepse so far has de-listed 43 companies; and most of the de-listed companies are virtually non-existent. As a result, their shares are also not in circulation. However, the general public is reluctant in buying the shares of the de-listed companies that are still operating, considering them highly risky. Besides, thousands of share-holders that have shares of the de-listed companies like Nepal Bank Ltd (NBL), which was de-listed from Nepse due to its poor financial condition, are not even aware that they can trade their shares. The share holders of the banks that have already distributed the shares through IPOs but not yet listed on the Nepse are simply not interested in over-the-counter transaction and prefer to hold the shares until they are listed on the stock exchange in the hope of getting a better return. "In some cases, companies themselves are not interested in selling their stocks, in retail, over-the-counter," Shambhu Pant, Nepse's spokesperson said. Similarly, in the last eight years, only a nominal number of corporate bonds and government bonds have been traded in the secondary market. "Public are not interested in buying the bonds from the secondary market, they will rather buy directly from the primary market or wait for a new bond to hit the market," spokesperson of Nepse said. "Likewise, government bonds are mostly bought by BFIs to fulfill their Statutory Liquidity Requirements (SLR) as directed by the central bank. Thus they hold the bonds and the general public also hold them as a safe investment tool," he said. |
| Source: tht |
Friday, April 30, 2010
Depositors lose confidence
Despite various measures commercial banks could not increase the deposits, the deposit mobilisation has increased by only 4.2 per cent amounting to Rs 22.9 billion till the first eight months of the current fiscal year. According to the Nepal Rastra Bank (NRB)'s macroeconomic report of first eight months of current fiscal year, the total deposit amount with the commercial banks increased by only 4.2 per cent to Rs 572.7 billion whereas in the same period of last year the total deposit had increased by 14.3 per cent. Currently, the banks and financial institutions (BFIs) are distressed due to dwindling deposits so that they have been raising the interest rates to attract new deposits. The money coming in the bank is waning mainly due to loss of confidence in the banking system and due to shrinking remittance inflows. The shortage of cash last October has also played a major role. Likewise, due to Anti-money Laundering Act people are apprehensive to go to banks to deposit the money, though the Act has been brought according to the international rule. Under the act, a depositor who deposits more than Rs 1 million needs to disclose the source of income while depositing at the BFIs. To avoid disclosing the source, the depositors are shying away from banks to deposit the large amounts. Lack of awareness among the depositors has caused a huge loss of deposits. The private sector credit of commercial banks has increased by 16.5 per cent. Among the total private sector credit, the credit to production sector increased by 9.5 per cent in the first eight months of the current fiscal year in comparison with the growth of 12 per cent in the samer period last year. Under the production sector credit, the credit to sugar, cement, iron and steel industries observed a greater credit expansion. Similarly, credit to agriculture sector has also increased by Rs 2 billion. "Credit to wholesale and retail businesses has also expanded by 23.2 per cent and the credit to finance, insurance and fixed assets also increased by 41.6 per cent while the credit to service sector increased by 20.2 per cent," said the report. The credit to real estate sector was extended to Rs 14.9 billion as compared to Rs 7.7 billion in last year's corresponding period. The liquid assets of the commercial banks stand at Rs 167.9 billion by mid-March. Among the liquid assets, liquid fund has declined by 9.7 per cent. This decline in liquid fund of commercial banks is attributed to the decline in commercial bank's balance with the NRB as well as balance held abroad. The balance held abroad by commercial banks has gone down by Rs 4.3 billion amounting to Rs 49.2 billion whereas the balance with NRB has declined by Rs 10.1 billion. Similarly, commercial bank's investments in government securities have also declined by 12.3 per cent. The liabilities, assets structure of commercial banks has also changed due to higher growth of commercial banks' loans and advances relative to their deposit mobilisation. The serious concern is credit to deposit (CD) ratio. The CD ratio increased to 90.2 per cent in mid-March from 81.2 per cent in mid-July 2009. "The liquidity-deposit ratio also declined to 29.3 per cent in mid-March 2010 from 34.2 per cent in mid-July 2009," said the report.Source:
THT
Friday, November 27, 2009
Class C license to Reliance Finance Company
Nepal Rastra Bank provided class C license to Reliance Finance Company. The company, which will be in 84th position among financial institutions, has Rs 250 million authorized capital, 200 million issued capital and Rs 140 million paid-up capital. It will have 70 per cent promoters' shares from various sectors industrial, educational and others ¿ and 30 per cent ordinary shares. The company plans to establish its office in BJ Building at Bhrikutimandap here.
Source:
THT
Friday, November 20, 2009
Commercial banks galore
Monday, November 16, 2009
15% Bonus share: Siddhartha Bank
Last year, the bank had provided 15 percent bonus shares and also decided to issue 2:1 right share, however the book closure of right share is yet not finalized.
According to the fourth quarter financial report of the bank (2065/66), the bank has posted Rs. 215.602 million net profit and Rs. 347.660 million operating profit. Likewise, the bank has Rs. 952.200 million as paid up capital and holds Rs. 331.759 millions in its reserve and surplus account.
Source:
Jamb News Service
Mission Dev. Bank Soon to commence its operation
After taking permission from Nepal Rastra Bank in 21st October 2009 (2066 Kartik 4), Mission Development Bank is going to commence is operation from Butwal as a regional level development bank. The bank which has its head office in Butwal has issue capital of Rs 200 million and paid up capital of Rs. 100 million.
Source:
Jamb News Service
Friday, October 30, 2009
Rupee's fall continues
REPUBLICA
KATHMANDU, Oct 29: The sustained depreciation of Nepali rupee against the greenback continued for seven straight days as it recorded a fresh slide of 24 paisa on the rate fixed for Friday.
Accordingly, Nepal Rastra Bank, the central bank of the country, has fixed the selling exchange rate of partially convertible rupee at 76.13 per US dollar for Friday while the exchange rate was fixed at Rs 75.89 per US dollar on Thursday.
Similarly, the buying rate of a US dollar has been fixed at Rs 75.53 for Friday whereas it was Rs 75.29 per dollar on Thursday.
Since Nepali rupee maintain a fixed exchange rate with Indian currency, any fluctuations seen in the Indian currency is directly reflected in the exchange rates of Nepali rupee with other convertible currencies.
According to international news agencies, the Indian rupee dropped toward one-month low on Thursday mainly due to weak global shares that pushed down regional equity markets and other regional units.
Tuesday, October 27, 2009
Market experiences liquidity shortage
27, Oct 2009
In an early indication of tightening liquidity in the money market, the inter-banking lending rate has scaled up to a new height and the discount rate on 91-day treasury bills has also increased. Bankers told that due to shortage of liquidity that the market experienced after the end of festivals, the inter-banking rate has increased to 8 percent from around 3 percent when the market opened after festival holidays.
Though a light liquidity shortage is a usual post-festival phenomenon in Nepal, this time it has been aggravated further by sluggish government expenditure due to delay in endorsing fiscal year budget from the parliament, said a leading banker. According to a senior official of Nepal Rastra Bank (NRB), the shrinking bid amount submitted by the banks against the latest 91-day treasury bills is the strongest proof that the financial institutions are in shortage of liquidity. The NRB offered treasury bills worth Rs 500 million on Monday but the bid amount submitted by the banks totaled Rs 980 million and the discount rate offered has also gone up to 4.48 percent from 3.75 percent recorded two weeks back.
"Though the bid amount is more than the offered amount, the worrisome fact is that the bid amount in the past used to be four to five times more than the offered amount but this it is not even double now," said the official. Bankers said the latest shortage of liquidity was also an impact of chronic note shortage that the country witnessed just before Dashain, Nepal´s biggest festival. As the banks are demanding more cash to settle intra-branch flow of funds made during the crisis, there is higher demand of liquid cash, said a banker.
He also added that pace of deposits coming back to banks has remained slow compared to previous years´ trend, may be due to the shattered confidence of depositors as they had to be in long queues outside banks to withdraw cash just before the Dashain festival.
Source: myrepublica.com
