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News item 23-10-2008 |
In
a bid to get sufficient
capital reserves in
registered banks and
financial institutions and
to ensure financial
stability,
Nepal Rastra
Bank (NRB),
the central bank, has
enforced Prompt Corrective
Action (PCA) with effect
from October 17. NRB said in
a statement Wednesday that
any bank or financial
institution under category
'A', 'B' or 'C' will
immediately be punished as
per the existing law if it
is not found to be
maintaining the capital
adequacy ratio fixed by the
regulator. The central bank
said it will prevent the
concerned banks and
financial institutions from
declaring dividends and
bonus shares if their
minimum capital ratios are
found to be up to two
percentage points less than
the required ratio.
Similarly, if the capital
reserves are found to be
between 2 and 4 percentage
points less than the
specified limit, the central
bank would impose a cap on
the amount of loans to be
issued by those banks and
financial institutions. For
those banks and financial
institutions whose minimum
capital adequacy ratios are
less by 4 to 6 percentage
points than the level fixed
by the regulator, then they
will be restricted from
opening new deposit accounts
and issuing additional
loans, NRB said. Likewise,
NRB can bar the concerned
banks and financial
institutions from increasing
salaries and benefits of
employees, recruiting
additional workforce as well
as promoting staff in case
the capital reserves
maintained by them are found
to be 6 to 8 percentage
points less than the minimum
capital reserve ratio.
Read more about Nepal Rastra
Bank regulations
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Loans for purchasing
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(17-2-2007)
CEO Nepal bank resigns
(17-2-2007)
Merger
of Nepal Bangladesh Bank,
Nepal Sri Lanka Merchant
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(8-2-2007)
Nepal Stock Exchange
suspends trading of
Nepal Credit and
Commerce Bank
(30-1-2007)
Development Credit Bank
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Buddha on bank notes
(25-1-2007)
agricultural development
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recovery plan for bad
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Easy
money and Nepali loans
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