nrb circulars 2066/67

Circular-1 .............................................................................................................................................................................. 5

Date- 2066-4-16 .......................................................................................................................................................... 5

Withdrawal of action: ................................................................................................................................................ 5

Circular-2 .............................................................................................................................................................................. 5

Date- 2066-4-19 .......................................................................................................................................................... 5

a) Provision relating to black listing: ....................................................................................................................... 5

b) Publication of Financial statement: .................................................................................................................... 5

Circular-3 .............................................................................................................................................................................. 5

Date- 2066-4-30 .......................................................................................................................................................... 5

a) Single obligator limit: ............................................................................................................................................ 5

b) Statutory liquidity ratio (SLR): ............................................................................................................................ 5

c) Fines and penalties for not fulfilling the SLR limit .......................................................................................... 6

d) Deprived sector lending: ...................................................................................................................................... 6

e)Transaction through cheque: ................................................................................................................................ 6

Circular-4 .............................................................................................................................................................................. 6

Date- 2066-5-7............................................................................................................................................................. 6


Circular-5 .............................................................................................................................................................................. 6

Date- 2066-5-14 .......................................................................................................................................................... 6

a) Cheque purchase:................................................................................................................................................... 6

b) Policies regarding investment:............................................................................................................................. 7

Circular-7 .............................................................................................................................................................................. 7

Date- 2066-6-4............................................................................................................................................................. 7

a) Balance calculation during CRR Dashain: ......................................................................................................... 7

b) Issue of approved loan: ........................................................................................................................................ 7

Circular-8 .............................................................................................................................................................................. 7

Date- 2066-6-4............................................................................................................................................................. 7

Subsidiary company: .................................................................................................................................................. 7

Circular-9 .............................................................................................................................................................................. 8

Date- 2066-6-7............................................................................................................................................................. 8


Circular-11 ............................................................................................................................................................................ 8

Date- 2066-6-29 .......................................................................................................................................................... 8

Average deposit: ......................................................................................................................................................... 8

Circulars No.12 ................................................................................................................................................................... 8

Issued Date: 2066/07/13 .............................................................................................................................................. 8

Renewal of margin type lending .............................................................................................................................. 8

Underwriting of share and debenture ..................................................................................................................... 8

Representative of CEO ............................................................................................................................................. 9

Circulars No 13 ................................................................................................................................................................... 9

Issued Date: 2066/07/18 .............................................................................................................................................. 9

Circular No. 14 .................................................................................................................................................................... 9

Issued Date: 2066/07/20 .............................................................................................................................................. 9

Circular No. 15 .................................................................................................................................................................. 10

Issued Date: 2066/07/22 ............................................................................................................................................ 10

Conditions for establishment of subsidiary company ........................................................................................ 10

Document to be submitted to NRB for establishment of subsidiary company ............................................ 10

Activities to be executed by subsidiary company ............................................................................................... 10

Activities not to be done by the subsidiary company ........................................................................................ 10

Circular No. 16 .................................................................................................................................................................. 11

Issued Date: 2066/07/22 ............................................................................................................................................ 11

Circular No. 17 .................................................................................................................................................................. 11

Issued Date: 2066/07/23 ............................................................................................................................................ 11

50% should be women............................................................................................................................................ 11

Circular No. 18 .................................................................................................................................................................. 11

Issued Date: 2066/08/02 ............................................................................................................................................ 11

Circular No. 19 .................................................................................................................................................................. 12

Issued Date: 2066/08/08 ............................................................................................................................................ 12

Capital Plan ............................................................................................................................................................... 12

SOL ............................................................................................................................................................................ 12

Circular No. 20 .................................................................................................................................................................. 12

Issued Date: 2066/09/02 ............................................................................................................................................ 12

SOL on Real estate .................................................................................................................................................. 12

Amendment in the form 9.3 (a )and 4 (a) ............................................................................................................ 13

CD Ratio ................................................................................................................................................................... 13

Merchant Banking .................................................................................................................................................... 13

IC purchase for 'D' Class Institution .................................................................................................................... 14

Circular No. 21 .................................................................................................................................................................. 14

Issued Date: 2066/09/05 ............................................................................................................................................ 14

Circular No. 22 .................................................................................................................................................................. 14

Issued Date: 2066/09/09 ............................................................................................................................................ 14

Circular no: 23 ................................................................................................................................................................... 14

Issue date 2066/09/22 .............................................................................................................................................. 14

Circulars No 24 ................................................................................................................................................................. 15

Circulars No 25 ................................................................................................................................................................. 15

Circulars No 26 ................................................................................................................................................................. 16

Circular no: 27 ................................................................................................................................................................... 16

Circular no 28 .................................................................................................................................................................... 18

Circular no 29 .................................................................................................................................................................... 18

Circular no; 30 ................................................................................................................................................................... 19

Circular no 31 .................................................................................................................................................................... 19

Circular no 32 .................................................................................................................................................................... 19

Circular no 33 .................................................................................................................................................................... 20

Circular 34 :Opening a foreign Branch by commercial bank.( Apllicable to A class Bank only) ........................ 20

Circular 35 Cash deposit for LOI licencing policy ...................................................................................................... 20

Circular 36: Could not be opened .................................................................................................................................. 20

Circular 37: ......................................................................................................................................................................... 20

Circular 38: Transfer of promoter’s Right Share and clarification on SLR ............................................................. 21

Circular 39: Investment in BFIs by NRN and Revision in refinancing facilities .................................................... 21

Withdrawn of Provision ................................................................................................................................................ 22

Circular 40: Withdrawl of actions against 5 willful defaulters on loan of Nepal Bank Ltd. ................................. 22

Issued Date:2067/1/6 ................................................................................................................................................... 22

Circular 41: Ammendment in annex 4(a), Sale of Promoter Share and addition in unified 12-66, CRR ........... 22

Issued Date:2067/1/8 ................................................................................................................................................... 22

Credit Deposit Ratio ..................................................................................................................................................... 23

Sale of Promoter Share 10-66(14) ............................................................................................................................... 23

Addition in unified 12-66 2(2.1) .................................................................................................................................. 23

12-66 point no. 4 Process for black listing. ............................................................................................................. 23

13-066 (CRR Point no. 1) .............................................................................................................................................. 23

Direction no. 9 form 9.9 is deleted related to CRR. .................................................................................................. 24

Circular 42: CRR ............................................................................................................................................................... 24

Issued Date:2067/1/27 ................................................................................................................................................. 24

Circular 43 Revision on unified directives 2-66 point 9 and 10-66, point 16 ......................................................... 24

Issued Date:2067/1/31.................................................................................................................................................. 24

Applicable to restructure and rescheduled loans ................................................................................................. 24

Circular 44: Export Refinancing Facility(Applicable to A class bank) ..................................................................... 25

Circulars No 45 ................................................................................................................................................................. 25

Circular-1

Date- 2066-4-16

Withdrawal of action: Not applicable; related to NBL

Circular-2

Date- 2066-4-19

a) Provision relating to black listing:

Employees, CEO, or Promoters, who has taken loan equal or more than 25,00,000 and fails to pay

shall be listed in black list until they do not pay the cash penalties.

b) Publication of Financial statement:

Bank has to publish its audited financial statement, other related annexure and annual report as a

booklet. It has to be published its balance sheet, profit & loss a/c, cash flow statement and annexure

4.1(share capital and ownership).

4.2 (Reserves and Funds).

4.17 (Contingent liabilities).

4.30 (Capital adequacy table), in a national level newspaper also.

Circular-3

Date- 2066-4-30

a) Single obligator limit:

Fund based limit: 25% of primary capital.

Combination of without fund-based limit and fund based limit (in total): 50% of primary capital.

However, it will be 25 % of primary capital at end of Ashad 2067.

b) Statutory liquidity ratio (SLR):

Development Bank should maintain (SLR); up to poush end 2066; 2% of home country deposit

must be invested to government securities. The above limit shall be 3% at end of Ashad 2067.

While calculating SLR the following provisions are to be kept in mind.

Home country deposit made end of last month.

Investment made in government securities for each month. Such details are reported by

fulfilling the form no.13.3.

c) Fines and penalties for not fulfilling the SLR limit

For first time: Bank rate multiplied to the difference between SLR limit and actual happened.

For second time: 200% of the penalty of first time.

For third and more time: 300% of the penalty of first time.

d) Deprived sector lending:

Two percent of total outstanding loan must be lend to deprived sector. The deprived sector lend

cannot exceeds Rs 150000 per family.

Note: The lending to following is taken as deprived sector lending.

Shipping for wool production

Garment

Seeds production

Construction of cold store by farmers

Marketing of agricultural productions by farmers

Micro irrigation

Tube well

e)Transaction through cheque:

Payment of more than Rs. 50,00,000 must be made through a/c payee cheque.

Circular-4

Date- 2066-5-7

Withdrawal of action: Not applicable; related to NICC

Circular-5

Date- 2066-5-14

a) Cheque purchase:

The bank cannot purchase the cheque with family member of promoter or employee. If such cheque

is purchased or collected, it shall be cashed within three days.

b) Policies regarding investment:

Held for trading;

This is short-term investment, which gives profit on market fluxion. It shall be valued on market to

market on daily basis. The difference is shown in p/l account. It is reported with form no.4.12.1

Note: Short-term investment means investment made for the period less than 1 month.

Held to maturity:

Investment normally retained to its maturity is classified under this class. It is valued on amortized

cost. The actual cost and amortized cost (i.e. impairment) is adjusted in p/l account. The reporting

form is 4.12.2

Available for sale:

Investment not included in held for trading and held to maturity is investment for sale. They are

valued on market to market on regular basis. The difference shall be adjusted is reserve. For the

purpose investment, adjustment reserve can create. The reporting form is 4.12.3.

Circular-7

Date- 2066-6-4

a) Balance calculation during CRR Dashain:

For the balance, counting during Dashain Ashoj 11 to Ashoj 24 is taken as a week.

b) Issue of approved loan:

The bank must issue a/c payee cheque when issue the approved loan, unless the party to whom loan

is to issue has opened account in this bank.

Circular-8

Date- 2066-6-4

Subsidiary company:

Licensed development bank, creating a subsidiary company of class D, shall issue loan (karja) to

deprived sector. In this regard, the following conditions are to be fulfilled:

The promoters of bank must acquire minimum 51% and maximum 70% shares of subsidiary

company.

The financial statement of subsidiary company must be incorporated with the financial

statement of main company.

Capital adequacy shall be calculated separately for subsidiary company. Moreover, unified to

main company. The consolidated capital adequacy rate for this purpose is 11%.

The transaction between main company and subsidiary company should be based on arms

length transaction. That intercompany transaction is will be disclosed as related party transaction.

The subsidiary company having licensed for micro finance must issue its at least 30% shares to

public.

Circular-9

Date- 2066-6-7

Withdrawal of action: Not applicable; related to NBL

Circular-11

Date- 2066-6-29

Average deposit:

Average deposit means the average of each day-end deposits. This is applicable from 2066/07/01.

This circular clarifies the circular no. 5 point no. 3 issued on 2066/5/14, which allows interest

calculation on weekly, monthly, quarterly or based on any other prescribed time.

Circulars No.12

Issued Date: 2066/07/13

Renewal of margin type lending

Conditions:

Repayment of 50% of margin lending loan, payment of interest (interest should not due)

Maximum of 50% of remaining principal is renewed.

Underwriting of share and debenture

Limit on underwriting:

In one organized institution- 20% of Core Capital

In all organized institutions- 100% of Core Capital

Representative of CEO

Non-executive director/chairman cannot represent CEO on his absence.

Circulars No 13


Mobile Banking Service

Mobile Banking Service to be provided in any places except in metropolitan, sub-

metropolitan and municipality.

Cash, cash in transit, vehicle, staffs involved and other assets to be insured.

Security system management to be done by bank itself.

Approval from Nepal Government Department or authorized person needed. Advanced

communication device should be installed for prompt communication with the local police and

administration.

Deposit and payment to be done in Nepalese rupees only.

Standby of security guard with weapon should be made available all the time.

Mobile banking service should only provide services of taking deposit and remittance of

money.

Communication and infrastructure system to be installed in the mobile vehicle.

Log book of the vehicle and other document authenticating transactions occurred in the

related area to be kept by the responsible staffs.

Any problem in technology management resulting in clash of database should be borne by

the bank itself.

BOD decision is necessary for operation of Mobile Banking Service.

Circular No. 14


Approval required for appointing foreign technicians

Approval from Deparment of Labour is necessary for appointing foreigner as seconded staff for

Technical Service.(Labour Act and Rules)

Circular No. 15


Subsidiary of Merchant Banking

Conditions for establishment of subsidiary company

Approval of Securities Board and Nepal Rastra Bank is necessary.

Subsidiary company should be public limited company and 30% of its equity share to be

distributed to public.

There should be minimum 51% and maximum 70%of promoter shareholding of parent

company.

Capital Fund as prescribed by NRB to be fulfilled by parent company.

Non-performing loan should be less than 5%in previous quarter of parent company.

Issued share capital as prescribed by NRB to be fulfilled by parent company.

Document to be submitted to NRB for establishment of subsidiary company

Memorandum of Association and Article of Association.

Certificate of registration of IRD and CRO.

Audit Report of previous 3 years

Copy of BOD decision.

Activities to be executed by subsidiary company

To work as an issue manager

To work as an underwriter

To conclude an agreement with customers for managing investment related work for its

customers.

Work as a market producer

Activities not to be done by the subsidiary company

To act as a stock broker

To transact its own shares

1. Disclosure of related party transaction by both parent and subsidiary company is necessary.

2. Auditing of subsidiary company to be done by auditors listed on NRB

3. Consolidated financial statement to be prepared by parent company.

4. Exemption in cases of investment on 10% of issued capital in one organized institution, if

share is distributed to public within two years after commencement of its operation.

Circular No. 16


Withdrawl of action against willful defaulter.

Action against default on repayment of loan taken from Everest Bank Limited by Sidheshwori

Industries Pvt Ltd, related persons Hari Prakash Budhathoki, Shailendra Prakash Budhathoki and

Rama Budhathoki has been withdrawn by NRB as on 2066/07/10.

Circular No. 17


Extension of operation area by Limited Banking, NGO's

Conditions for extending operation in various other districts.

NGO has operated for 3 years,

Has no accumulated losses,

Activities to be conducted within all districts for approved area,

Number of members required

50% should be women.

i. Kathmandu valley- Three thousand

ii. Terai area- Two thousand

iii. Hilly area- One thousand

Circular No. 18


Technical Service Agreement, TSA for Technology Transfer

Related to joint venture of bank and financial institutions.

Approval from Department of Industries or Department of Cottage and Small Industries of

Government of Nepal is necessary for concluding Technical Service Agreement between foreign

investor and bank and financial institution.

Circular No. 19


Amendment in capital plan & Single obligatory limit (SOL)

Capital Plan

Previous deadline 2067 Ashad

Amendment Till 2067 Chaitra

SOL

2.1 Before 2067,Shrawan 1

Fund Based- 25% of Core Capital

Non Fund Based- 50% of Core Capital

2.2 From 2067,Shrawan 1

Fund Based and Non Fund Based- 25% of Core Capital (Amendment as per circular

no.19, applicable date 2067, Magh 1)

Circular No. 20


Limit on Real Estate, Amd 9.3,4.a, CD Ratio, Interest Bearing Ac, Merchant Bank, IC

Purchase for D

SOL on Real estate

1.1. Housing/Land and Real Estate loan

Maximum 60% of Fair Market Value(FMV)

1.2. Real Estate loan should be- 25% of Total Loan

Real Estate and Residential housing loan- 40% of Total Loan

1.3. Percentage on total loan within the limit prescribed for respective time frame

Ashad 2068 Ashad 2069

Real Estate 15% of total loan 10% of total loan

Real Estate and Residential housing loan

30% of total loan

25% of total loan

a. Restructuring or renewal of the above said loan cannot be done if it crosses the limit stated

above for respective time frame.

b. If loan is provided for multi-residential houses by one bank or leading bank under

consortium financing, any down payment or amount after opening a booking is to be deposited in

the above said bank or lead bank.

Amendment in the form 9.3 (a )and 4 (a)

Amendment in the form 9.3(a) related to Product wise loan and 4(a) related to Unaudited quarterly

financial report has been made.

CD Ratio

CD Ratio should be 80% and if the limit is above the prescribed percentage, then it should be

brought within the limit stated below for the respective time frame.

Period 2067 Ashad 2068 Ashad 2068 Poush

CD Ratio 95% 85% 80%

Merchant Banking

If approval from Securities Board is done previously before issue of directive and circular and the

bank and financial institution has not completed its three years, it shall not hinder the bank and

financial institution to establish a subsidiary company.

IC purchase for 'D' Class Institution

'D' Class Institution can buy Indian Currency from public and is allowed to sell only to bank and

financial institutions.

Circular No. 21


Amendment in Standing Liquidity Facility

Interest calculation

i. Average closing rate of previous 91 days T-Bill

ii. Market rate

iii. Previous ripo bolakbol closing rate within the period of one month.

Interest is calculated on the above rate on the basis of whichever is higher . 3% of penal interest is to

be charged on the above rate calculated.

Circular No. 22


Period to be taken as week for the purpose of CRR

Week- 2066 Poush,5 to 2066 Poush,18

Circular no: 23

Issue date 2066/09/22

1. Revision in clause 6.2 of licensing policy, 2063

a. Application and other relating document is to be provided to NRB for its approval to

establish bank and financial institution. If NRB is satisfied with the provided document then, it shall

give approval for establishing bank and financial institution with conditions or without it within 120

days after receiving application.

b. Minimum 5% of total share capital declared to subscribe by the promoters is to be deposited

within 7 days after being ordered by NRB to open a bank a/c.

c. Within 30 days after receiving letter of intent, 45% of declared share capital is to be

deposited in cash or bank guarantee. Bank guarantee for less than one year is not accepted .

d. Bank should prepare its physical infrastructure and certificate of commencement of its

operation to be taken within 9 months after receiving letter of intent.

e. Number of promoters cannot be added after letter of intent is received. if any promoter is

dead then, his/her portion of share is transfer to his/her beneficiary. Beneficiary can subscribe all or

some portion of shares and if only some portion is subscribed then, the remaining no of share is to

be sold to the existing promoters.

f. After receiving letter of intent, if any promoters do not want to subscribe the shares or less

no shares is subscribed than declared, then the unsubscribed shares are distributed amongst the

existing promoters.

g. After letter of intent is received, if any proposed promoter dies then any changes on

composition of promoters shares cannot be done except approval is given by NRB.

Circulars No 24

Issued date: 2066/09/28

Prohibition on IPO, Organized sector definition

Share kept aside for public offering cannot be sold to promoter, directors and their families. But, if shares are not fully subscribed by the public within the said time period then, it can be sold to

promoters, directors and their families.

Any shareholders who subscribed promoter's shares may not take position on election of Directors other than the promoter group.

Circulars No 25


Extension of time to streamline beyond geographical area lending

Previous Deadline: 2066, Poush

Extended time: 2066, Ashad

Circulars No 26


Revision on point on 9 of Unified directive 1

If A, B and C class financial institution could not maintain the ratio of Capital Fund as prescribed by the NRB in its directive then, punishment under Prompt Corrective Action related policy, 2064 is imposed.

If D class financial institution could not maintain the ratio of Capital Fund then, the BOD within 45 days should give explanation and document regarding capital planning and program about maintaining the prescribed ratio to NRB. Dividend and bonus shares cannot be distributed to the shareholder until prescribed ratio of Capital Fund is

maintained.

In middle of any F/Y, if the prescribed ratio of Capital Fund is not maintained but at the end of that F/Y prescribed ratio is maintained then, also dividend and bonus share cannot be distributed. If the financial statement is audited from external auditor at the end of F/Y and according to the auditor the

ratio of Capital Fund maintained is satisfactory then as per the approved capital plan dividend and bonus

shares can be distributed.

If PCA is implemented between the end of F/Y and approval of financial statement by AGM, no dividend and bonus share can be distributed and declared even if ratio of Capital Fund is satisfactory and external auditor certifies the financial statement.

Circular no: 27


Foreign currency transaction, Amd in ca frame work, Amd in anusuchi 4, 30

1. Foreign currency transaction

a. 'B ', 'C' and 'D' class bank and financial institution can perform work relating to inward

remittance.

b. 'B and 'C' Class bank and financial institution can buy and sell Indian currency.

c. National level 'B' class bank can accept foreign deposit.

d. National level 'B' class bank can buy and sell foreign currency, open foreign account and

nostro account.

e. 'B and 'C' class bank and financial institution can act as an agent of approved bank for

issuing Nepalese and Indian currency's Debit and Credit card.

f. B class financial institution except national level 'B' class bank can buy foreign currency and

sell to NRB or commercial banks only.

2. Amendment in schedule 1.1, para 6.4[a(6)], form no 1,3 & 6 relating to Capital Adequacy

Framework,2007 has been done. Form no 8 relating to Net liquid asset to total deposit ratio has

been added. (Related to A class bank and financial institution).

Where the bank's net liquid asset to total deposit ratio is less than 20%, a risk weight of 1% (as given in the table below) of total deposit, for each percent or portion of percent shortfall in such ratio, is added to total of the Risk Weighted Exposures.

Net liquid asset to total deposit ratio

A risk weight to be added to the Risk Weighted Exposures

19% - less than 20% 1% of total deposit



16% - less than 17% 4% 4% of total deposit

15% - less than 16% 5% of total deposit and so on.

For this purpose, liquid assets include cash and bank balances, money at call & short notice, placement upto 90 days and investment in government securities. Borrowings repayable upto 90 days is deducted from liquid assets to obtain net liquid assets. 3. Amendment in the schedule 4.30ka(1), 4.30(kha) and 4.30(gha) has been done again. (Previously by circular no 2, issued date 2066/4/19).

Circular no 28


Withdrawal of action against 6 willful defaulters.

Lending Bank Borrower and

related person

Address

Nepal SBI Bank Samata Agrawal

hari Dhanwat

Kisan Dhanwat

BSM-3/386

BSM-3/386

BSM-3/386

NBL Manju Dhanwat

Kisan Dhanwat

Biratnagar-3

Circular no 29


Revision on margin type lending

a) The respective bank has to margin call due to change in market price of share, it shall bring in to

limit with in 21 days, giving a notice to loan borrower.

But: decrease in market price below 10% of original price shall not be considered.

b) The bank has to collect the margin call with in prescribed time. Such time shall be prescribed in

notice of margin call.

c) If the margin call is not collected as per the notice, the bank can sell such shares through stock

exchange with in 7 days from the expiry of time prescribed in notice.

d) If the loan is still unsettled, the bank shall make 100% provision for remaining portion of loan.

Note: margin type lending shall be renewed if the borrower refunded at least 25% of loan taken and

all the interest accrued to the date.

Circular no; 30


Postponement to Deposit in Yuba Sworojgar

Bank and financial institute have to postpone the deposit to Yuva Sworojgar Kosh from 2066

Chaitra. But this notice may not restrict to deprived sector lending.

Circular no 31


Deposit mobilization to D Class financial institution

' D' class financial institution transacting in retail micro banking can mobilized deposit from public if

certain conditions are fulfilled.

Sources of financing should be 30 times of Core Capital.

Maximum 5 times of Core Capital can be mobilized from the general public.

Saving and 2 years fixed deposit can only be made a source of financing from public.

Maximum 20% of total deposit can be mobilized as source of financing through any firm,

company of organized institution.

2% of total deposit as CRR is to be deposited in NRB if no office of NRB is established in

any places, then in the current a/c maintained in the commercial bank.

Circular no 32


Net liquid assets, derivatives investment

A and B Class financial institutions can transact in derivative such as forward, options, swap, futures

if it is done within the standard prescribed by BOD.

New share can be issued to public share if it is done within the prevailing Laws of Securities.

Circular no 33

Tables…

Circular 34 :Opening a foreign Branch by commercial bank.( Apllicable to A

class Bank only)

Issued Date:2066/12/14

Circular 35 Cash deposit for LOI licencing policy


Promoter should submit deposit slip of 45% of amount of share capital which they have promised to purchase. The bank should be A class licensed institutions.

Deposit should be made within 30 days of getting letter of intent.

Non performing loan should be less than 5%

Liquid assets should be at least 20%.

Institution should fulfill the minimum requirement of paid-up capital within specified period. The amount deposited cannot be used before getting license.

The interest earned from deposit can be used only on the basis of VAT and PAN bill.

Institutions should get license within period of 12 month of getting letter of intent by fulfilling all the requirement of law and necessary infrastructures. Otherwise letter of intent will be cancelled.

Circular 36: Could not be opened

Circular 37:


Ammended in 1,2 and 20

Capital adequacy framework (disclosure requirement)

Banks are required to report to NRB their capital adequacy computations, according to the format as

specified in Annexure of this framework on a monthly basis within one month after the end of the month or

as required by NRB from time to time. All such returns has to be validated by the internal auditor of the

bank. If the monthly internal audit couldnot be carried out, it should be disclosed on the monthly returns.

But, such returns at the end of the quarter must be submitted with the validation from the internal auditor of

the bank. Annex 1.1 (7.4)

Directives 2 Classification of Loan and Advances

Addition of word or interest after word principal in first sentence.

Word mortgage is replaced by word Security. In provision of Loss loan.

Ammendment in Directives 20

Bank and financial institutions should disclosed th sentence ‘A’, ‘B’ ‘C’ ‘D’ class licenced institution from

Nepal Rastra Bank instead of A B C D class licenced institutions only.

Circular 38: Transfer of promoter’s Right Share and clarification on SLR


On issue of right share, bank and financial institutions itself can transfer ownership within the provision of

AOA and MOA if the promoter shareholder have ownership of share less than 2 % of total paid up capital.

For more than 2% of ownership prior permission from NRB is necessary.

For transfer the following condition should been fulfilled.

First priority should be given to same group or sub group.

If not on same group, bank and financial institution can transfer ownership to other promoter after verifying source of income and tax clearance.

If the transfer is not possible within promoter, then share can be transferred to other shareholder. The shareholder belongs to the same group from where the ownership has been transferred.

Share holder should fulfill fit and proper test.

Shareholder should not be blacklisted for loan.

Source of income and tax clearance of previous year deposit slip should be submitted.

Bank and financial institution should submit the statement of transfer to NRB.

Director, CEO, auditor, secretary, Management person and person directly associated with Account Section should not transfer and accept ownership within period of 1 year of leaving post.

Circular 39: Investment in BFIs by NRN and Revision in refinancing facilities


If the investment is by transfer of ownership in the form of promoter share,

Tax clearance certificate from local tax office or /and tax deposit slip of previous financial year or/and statement proofing there is no taxable income of the person should be submitted.

Self declaration letter also should be submitted.

The amount from NRN should be entered in the form of remittance according to the provision of NRN Act 2064 7(2).

The amount which is in excess of after calculating CRR can be utilized for calculating SLR.

The ratio of National deposit and primary capital to total loan and advance will be as prescribed by NRB circular.

Withdrawn of Provision

Non performing loan should be less than 5% if the bank and financial institutions utilize re financing facility.

The promoter of bank and financial institutions should not be provided re loan if he has utilized more than 20 % of total share ownership as loan.

Circular 40: Withdrawl of actions against 5 willful defaulters on loan of Nepal

Bank Ltd.


Company: Hotel centre point pvt.ltd.

Person Involved:

Bal Bahadur Pun

Ramesh Pd. Dhamala

Krishna Pun

Dhana Kumari Pun

Naresh Pun

Circular 41: Ammendment in annex 4(a), Sale of Promoter Share and addition

in unified 12-66, CRR


Credit Deposit Ratio

Addition of point 4.5, credit deposit ratio in annex 4(a) of directives 4-66 (Unaudited Quterly

Financial Report)

Sale of Promoter Share 10-66(14)

Bank and finaancial institutions can tranfer or sale promoter within promoter or transfer to other persons if the promoter shareholder holds less than 2% of paid up capital of bank.

New shareholder should be fulfill fit and proper test.

For the promoter holding more than 2% of paid up capital, transfer is not possible by means of break up. For this type of transfer, permission from NRB is necessary.

Addition in unified 12-66 2(2.1)

Quaterly Report should be submitted by licenced institutions by filling up form for following loan within 15

days of quarter end.

25 lakh or more loan

Loan of 10 lakh or more exceeding maturity period

Loan less than 25 lakh

If there is any change later, that should be also submitted within 15 days of change compulsorily. Bank anf financial institution should perform all the task related to loan information by establiching credit

information cell. (12-66 point no.2)

12-66 point no. 4 Process for black listing.

If condition is fulfilled as per directives, whatever be the amount of loan, bank and fianancial institutions can recommend the name of defaulters for black listing to credit information cell.

Credit information cell will blacklist the within 15 days.

If condition is fullfilled as per directives, in recommendation of bank and financial institutions, CIC can blacklist credit card customer within 15 days.

Bank and financial institutions can blacklist the customer having whatever amount of loan only if it blacklist the person having loan more than 25 lakhs.

If bank and fianancial institutions recommend to blacklist, CIC should blacklist the customer having any amount of loan.

13-066 (CRR Point no. 1)

For the purpose of CRR, cash in transit(CIT) in Rastriya Banijya Bank and Nepal Bank Limited can be

utilized in case there is not Nepal Rastra Bank in that area.

Deposit in cash reserve and withdrawl from cash reserve, respective bank and fianancial institutions should

send statement to cash management department and also in monitoring department. This transactions should

be included in weekly statements of cash reserve as per ammended direction form no. 13.1.

Direction no. 9 form 9.9 is deleted related to CRR.

Circular 42: CRR


2067/1/19 to 2067/2/1 is treated as 1 week for the purpose of counting CRR.

Circular 43 Revision on unified directives 2-66 point 9 and 10-66, point 16


Applicable to restructure and rescheduled loans

Good- Minimum 12.5%

Sub standard, Bad, doubtful- Previously prescribed

But principal and interest should be regular for 2 years.

Different statement should be prepared for these types of loans.

In the following cases, extra loan loss provision should not be maintained.

If principal and interest is regular for EMI loan.

If the installment amount and no. of installment become less because of prepayment

If the installment amount and no. has become less because of interest rate

The amount of installment can not be less than the installment prescribed at the time of providing loan if the amount of installment and no. increases or decreases because of change in interest rate.

1. Ratio of ordinary share to total capital after rescheduling should not be less than ratio of ordinary share to total capital before rescheduling. 2. There should be no addition in new shareholder in promoter group except for the bank and financial institutions which has to increase its capital to prescribed limit within the period of 2070. 3. Ordinary/Special resolution should be passed in AGM or EGM according to prevailing law of respective bank and financial institutions. 4. If already given consent, will be accordingly.

5. The bank and financial institutions which has got permission for increasing ratio of promoter share according to Directives 10/066 (16) circular 3/066 point no. 15 should not convert promoter share into ordinary share. 6. Record should be kept and disclosed in yearly financial statements of each financial year.

Circular 44: Export Refinancing Facility(Applicable to A class bank)


Circulars No 45


Addition in Merchant Banking, BOD of subsidiary, Credit to organized promoters of 'D' class

financial institution

1. Addition in Merchant Banking

Application to NRB for letter of intent and approval for establishing subsidiary company is to be forwarded to NRB. In addition to it, MOA and AOA of Subsidiary Company is to be submitted.

Investment done by Parent Company in its Subsidiary Company should be deducted from Core Capital in computation of Capital Fund of Parent Company.

2. BOD of Subsidiary Company

BOD or chairman/members of BOD of Parent Company cannot be in the BOD or

chairman/member of BOD of Subsidiary Company. If it is so before the issue of this circular then,

the director of parent company should be removed from the post of director in the subsidiary

company within one year from the issue of this circular or coming AGM of Parent Company

whichever is earlier.

nrb circulars 2066/67

Documents

b policies

slr limit

withdrawal of action

b issue of approved

cheque purchase

single obligator limit

balance calculation

crr dashain