KATHMANDU, Dec 24: The Banking Sector Reform Suggestion Task Force has recommended implementing the provision to convert promoter shares of banks and financial institutions into ordinary shares.
The task force, coordinated by economist Dr Rewat Bahadur Karki and including former banker Bhuvan Dahal, suggested this measure after reviewing the state of banking and the capital market.
Govt task force proposes to provide professional license for dr...
According to the task force, converting founder shares into ordinary shares would increase public ownership in banks while separating the roles of businesspersons and bankers.
“The law governing banks and financial institutions allows for converting founder shares into ordinary shares. Considering legal consultation and the current state of banking and the share market, this conversion should be implemented optionally within ten years. This will increase public ownership and distinguish the roles of businesspersons and bankers,” the task force said.
The Bank and Financial Institutions Act permits the conversion of founder shares into ordinary shares after ten years of operations.
However, despite many banks and financial institutions operating for over a decade, the central bank has yet to implement this provision.
For shares outside banks and financial institutions, founder shares are converted into ordinary shares once the three-year lock-in period ends.
