NCHL gets NRB nod to clear rupee cheques
|30, Mar 2012|
Nepal Rastra Bank (NRB) has given the go-ahead to Nepal
Clearing House Limited (NCHL) to clear cheques in domestic currency too. NCHL
was limited to clearing cheques in foreign currency until presently. The
central bank's board okayed the proposal on Wednesday. After starting
cheque clearance under the electronic system two months ago, NCHL has been only
clearing foreign currency cheques in the first phase so that clearing of a
limited number of cheques would give them experience to start clearance of
Nepali currency cheques.
"We have received the central bank's decision, and we will start clearing
domestic currency cheques starting from next week," said Neelesh Man Singh,
chief executive officer of NCHL. With
NCHL currently clearing 200 foreign currency cheques daily, it expects it will
have to manage clearing of more than 7,000 domestic currency cheques daily. The electronic cheque clearing system
was introduced to complete cheque clearing instantly as the manual system had
been taking up to two days.
Meanwhile, the NRB board also decided to extend its management hold over the
Nepal Bank Limited (NBL) for another year. The NBL management has remained
under the central bank's hold since 2001 and it had set the deadline of its
exit in mid-April this year.
"As NBL is initiating the process of implementing its capital plan to turn
itself into a healthy bank, the central bank decided to continue its management
control over the country's oldest bank," said NRB spokesperson Bhaskarmani
Gnawali. The NBL management is gearing up to issue 1:9.5 rights shares to raise
its paid-up capital to Rs 4 billion from the existing Rs 380 million. If the
rights shares are issued, each shareholder will have to invest 9.5 times his or
her current stake to meet the target.
The government has a 41 percent stake while private sector promoters and the
public hold the rest of the shares in the oldest bank. Under the capital plan,
the government has to invest Rs 1.5 billion which it has agreed to do in
principle. The bank is still facing a negative net worth of Rs 4.22 billion as
the financial reforms programme implemented in 2002 failed to make it healthy
despite significant achievements made in the area of automation and human
resources. Its non-performing loans also declined to 5.17 percent from 60
percent a decade ago as a result of the reform measures. However, its management says it still requires Rs 9.74 billion to
turn it into a healthy bank.
Meanwhile, the central bank's board has given a letter of intent for a merger
between Butwal Finance and Alpic Everest Finance. Annapurna Finance was allowed
to upgrade to a national level development bank. With the merger of Butwal and
Alpic Everest, the paid-up capital of the new company will amount to Rs 316.86
Annapurna has also already increased its paid-up capital to Rs 704.28 million
to be eligible to become a national level development bank. A national level
development bank needs to have a paid-up capital of Rs 640 million as per the
licensing policy of the central bank.