KATHMANDU: The Nepal Rastra Bank (NRB) has set a maximum limit of cash dividends that banks and financial institutions (BFIs) can distribute.
Issuing a procedure for giving consent to publish financial statements and approving dividends for the purpose of annual general meeting of BFIs-2077, the central bank stated that no matter what cash dividend capacity does a bank have, BFIs can distribute only 30 percent of the net distributable profit of the 2076-77 fiscal year.
As per the procedure, even for declaring and distributing cash dividend up to 30 percent of the net distributable profit, the weighted average interest rate of deposits maintained by banks in mid-July 2077 should not exceed one percent.
In addition, BFIs with a net distributable profit of less than 5 percent of the total paid-up capital have been barred to distribute cash dividends except for tax purposes.