Previously, Nepal Rastra Bank (NRB) had asked them to comply with this provision on promoter shareholding by mid-July 2011. [break]
Issuing a fresh circular on Monday, it announced to give one year more to the promoters of multiple BFIs to lower their promoter shares structures.
NRB had decided to limit BFI promoters from holding promoter share worth more than 15 percent of the paid-up capital in one institution and restricted them from holding more than 1 percent promoter shares in other institutions in 2006. NRB came up with such a provision mainly arguing that holding substantial promoter stake by the same person or group in multiple BFIs is against the good governance norms and basic interest of the sector as a whole.
It had given them 5 years duration to comply with the decision. However, referring to the present financial instability and also the gloom running deep in the stock market, the central bank has extended the deadline by a year to register their compliance to the NRB provision.
In case the promoters did not comply with the provision this year, the central bank cautioned it would bar them from enjoying dividend entitlements, freeze their bonus shares, and also restrict them from participating in rights issue. "NRB can also instruct the BFIs whose major promoter shares are held by same person or groups to merge," read the central bank´s directive.
Apart from share structure, NRB has also relaxed provisions on margin lending, allowing BFIs to renew good margin lendings - loans issued against shares - even after a year. So far, NRB had restricted renewal of such loans after a year.
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