KATHMANDU, Feb 8: Nepal Bank Limited (NBL) Chairman Basudev Adhikari has resigned from his position expressing dissatisfaction over the government intervention in the bank’s decision to provide dividends to the bank’s shareholders.
NBL’s annual general meeting held on January 13 had approved the decision to provide 16 percent dividend that includes 12 percent bonus share and four percent cash dividend. While Nepal Rastra Bank has given its green signal to NBL’s decision, the bank has also started the process to list the bonus shares in the secondary market.
Nepal Investment Bank AGM approves dividend proposal
But the NBL faced a setback after the Ministry of Finance (MoF) pressurized the bank to reduce the dividend to 10 percent, according to the bank’s officials. Earlier, the MoF had also barred the state-owned Salt Trading Corporation from its decision to distribute a 10 percent dividend from the net profit of the fiscal year 2016/17.
However, MoF officials said the ministry took the action against NBL after the bank breached a government rule. According to the Companies Act 2017, a public enterprise needs to take prior approval from its line ministry to distribute dividends. The MoF holds 51 percent stakes in the NBL.
Two years ago, the government had appointed Adhikari as the NBL’s chairman for four years.
