NRB Issues Revised Procedure on Financial Statements and Dividend Approval: Expert Clarifies

Kathmandu – Nepal Rastra Bank (NRB) yesterday issued the revised procedure for approving financial statements and dividends of banks and financial institutions. Following the release, several media outlets carried misleading reports, but financial expert Parshuram Kunwar Chhetri clarified that there are no major changes in the procedure.

According to him, since the adoption of NFRS (Nepal Financial Reporting Standards), the procedure had not been updated. This revision mainly incorporates relevant directives previously issued by the central bank, rather than introducing new provisions.

The most notable amendment concerns microfinance institutions. Previously, their promoters could hold a maximum of 15% shares in their own institution and up to 1% in other banks or financial institutions. The new revision has increased this limit to 25% and 10%, respectively.

For other banks and financial institutions, however, the shareholding limits for promoters remain unchanged. Similarly, the provision that blocks dividend distribution for promoters holding shares beyond the prescribed limit also remains intact, Chhetri noted.

In essence, the revised procedure has not introduced any harsh rules but has instead provided microfinance promoters with a slightly higher ownership ceiling.