However, the permission has laid down numerous conditions for the FIs to operate Retail Micro Banking. [break]
Financial institutions posting profit for three consecutive years, maintaining minimum reserve as specified by NRB, settlement of pre-operation cost, and having provisions of deposit mobilization from general public on their prospectus are the major eligibility criteria to enjoy the new benefit, NRB stated in a directives issued on Monday.
The FIs would also have to formulate their own policies on mobilizing savings, loans and investment, and maintaining reserves, besides adhering to the directives issued by NRB in the past.
Likewise, the FIs need to have non-performing asset of less than 5 percent and borrowers´ base of at least 2,500 members, totaling to 500 groups to mobilize the deposit from the general public.
The new directives also seek financial institutions to invest its capital mobilized through loans and borrowings from other institutions to their own customers.
The new directives have also set limit on volume and duration of deposits mobilization. As per the directives, total deposit collections made by a FI should not exceed five times of its primary capital. They can mobilize saving deposits and fixed deposits for up to two years.
Under the new directives, the FIs can also mobilize the deposit from the institutional customers but the volume of total institutional deposits must not be more than 20 percent of their total deposits.
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