We are under int’l pressure to cut paid-up capital deadline: Governor Nepal

Kathmandu February 29– NRB Governor Dr. Chiranjibi Nepal has revealed that he has been facing pressure from institutions like World Bank and the International Monetary Fund (IMF) to shorten the deadline provided to bank and financial institutions (BFIs) to meet the new paid-up capital.

The revelation came in the wake of complaints from the bankers that the two-year deadline set by the central bank was too short. “We have given BFIs a long time to meet the new paid-up capital requirement. We do not have any intention to extend the deadline. Instead, I am thinking about reducing the deadline as institutions like the World Bank and IMF are piling pressure on me to shorten the deadline saying that it is possible to raise paid-up capital within six months,” Nepal said at a program organized in Kathmandu on Sunday to unveil the mid-term review of the Monetary Policy for Fiscal Year 2015/16.

Though IMF has been urging the central bank to take initiatives for financial consolidation, Governor Nepal’s remark indicates that the central bank is in no mood to tolerate any laid-back approaches of the BFIs in strengthening their capital base. Earlier in November last year, IMF had even recommended NRB to take corrective action and administrative sanctions against BFIs that fail to meet the required capital levels.