NRB unsanctioned cash dividend proposal of Everest Bank

Kathmandu October 30- NRB has unsanctioned proposal of Everest Bank to distribute cash dividend. NRB has refused the proposal on the ground of lack of base for increase in paid up capital by 8 billion. According to NRB, submitted proposal of bonus share and cash dividend is against the capital increment plan that was submitted to NRB.

Everest bank had proposed of 30% bonus share and 6.58% cash dividend from its Rs. 1 billion 574.3 million net profit. High officials of NRB said that cash dividend cannot be approved in this situation.

NRB is in process of directing Everest bank to transform 6.58% cash dividend into bonus share. Before this, NRB rejected Citizen Bank's cash dividend proposal on lack of base ground.

Bank has submitted capital increment plan so as to meet Rs. 4 billion paid up capital with in current fiscal year. Bank had planned to cover Rs. 2 billion through merger, Rs. 540 million through share issue and 3 billion 530 million through issuance of bonus share.

BOD proposal of dividend of Bank and Financial Institutions required to be approved from NRB before distribution. After the approval from NRB, it is subjected to approve from AGM of the respective institutions.

Due to the low paid up capital, investors have expected more than 50% bonus share from Everest Bank. Everest Bank has Rs. 2 billion 190 million paid up capitals. After 30% bonus share its paid up capital will increase up to Rs. 2 billion 760 million. Punjab National Bank of India has 20% investment in Everest Bank. Source: online Kharbar