KATHMANDU, Dec 26: The government has been advised to take the state-owned Rastriya Banijya Bank (RBB) public.
The Banking Sector Reform Recommendation Task Force, in its reform roadmap submitted to Nepal Rastra Bank (NRB) on Tuesday, recommended that the government float initial public offerings (IPOs) of RBB. With a capital base of Rs 15.63 billion, RBB is the largest public enterprise in its category.
Two men behind the turnaround of Rastriya Banijya Bank
The NRB Board of Directors had formed the task force under the coordination of former Executive Director Dr. Rewat Bahadur Karki. Former Nepal Bankers’ Association President Bhuwan Kumar Dahal is a member of the task force, while NRB Executive Director Guru Prasad Paudel serves as member secretary.
Of the 20 commercial banks in Nepal, 19 have already floated their primary shares to the public, including the two other state-owned commercial banks—Nepal Bank Limited and Agriculture Development Bank.
Although the idea of taking RBB public has been discussed for a long time, it has not materialized due to a lack of government initiative. The Bank and Financial Institution Act 2017 also stipulates that commercial banks must issue a minimum of 30 percent of their shares to the general public.
At present, RBB has a paid-up capital of Rs 25.63 billion. If the bank issues 30 percent of its shares, it will be offering IPOs worth approximately Rs 4.69 billion to the public.
In the fiscal year 2024/25, RBB earned a net profit of Rs 3.81 billion. As of the first quarter of the current fiscal year, the bank recorded net profits of Rs 598.7 million—more than three times the amount earned during the same period last year.
