Conceptualization of Paid up capital by Nepal Rastra Bank, Bonus Share is finest option

Kathmandu October 5- Nepal Rastra Bank brought conceptual paper for rise of paid up capital after directing Banks and Financial Institutions in Monetary Policy two months ago. Nepal Rastra Bank has clarified the reasons behind the increment of paid up capital focusing mainly in bonus share issuance to raise the capital.

NRB has emphasizes on bonus share issuance along with equity shares, right share and preference share issuance. Similarly, merger and acquisitions are also listed by NRB to increase the paid up capital of BIFs.

Central Bank's Research Department has clarified behind the reasons of increase in Paid up capital through  ' A Position Note on Capital Hike for Banks and Financial Institutions' report

Central bank has given examples of different international countries on increment of paid up capital. According to the NRB, to increase GDP in next few years, the paid up capital should be increased as per the requirement demanded by the growth of the economy.

Central Banks also focused on the fact that Nepal has low capital  in compare to other  SAARC countries.