NRB amends bank licensing policy

New banks and Financial Institutions (FIs) cannot add new promoters after receiving Letter of Intent (LoI) from Nepal Rastra Bank (NRB), as per the new amendment in the licensing policy NRB. But, in the case a promoter dies after the bank has received LoI, the promoter's shares committed by him to own is transferable to the right holders. "If such right holder fails to purchase full or partial shares the existing promoters only can purchase these shares," the policy states.

Likewise, after receiving the LoI, only the existing promoters can make adjustment in promoters' shares if any promoter wants to leave the bank or reduce number of shares he has committed to own. No new bank or FI can change the promoter shareholders without taking a pre-approval from NRB in case any promoter shareholder dies after the bank or FI has been granted LoI.

Likewise, the banks and FIs will have to complete receiving operating license within nine months from the date the bank or FI received LoI and must have completed all legal procedures and managed physical infrastructures. "Otherwise, the given LoI gets automatically cancelled," stated the new amendment in the NRB' licensing policy.

Earlier, the banks and FIs were required to apply for operating license within six months of the establishment of the bank by registering it with the Company Registrar's Office (CRO). The banks and FIs needed to have been registered with CRO within three months from the date the central bank recommended for the same.

The new banks or FIs will have to submit the 45 percent of total share capital that the promoters committed to inject in cash or as bank guarantee within 30 days from the date of the bank receiving LoI. But, the duration of bank guarantee should not cross a year.
Source:eKantipur