Kathmandu. Nepali banks and financial institutions are becoming stronger on the basis of paid-up capital. The overall banking system seems to be becoming more reliable with the significant increase in the paid-up capital, which is considered to be decisive in building risk-bearing capacity, credit flow capacity and trust of the common customers in the financial sector.
Nepal Rastra Bank (NRB) has also been considering paid-up capital as a very important indicator while evaluating the financial strength of banks and financial institutions. On this basis, the country’s banks and financial institutions are reaching a strong position.
According to the NRB, the total paid-up capital of 54 banks and financial institutions operating till Mid-June 2082 bs has reached Rs 443.62 billion. This figure is an increase of Rs 7.21 billion compared to Rs 436.40 billion in the same period last year.
Given this increase in paid-up capital, the institutional capital structure seems to be strengthening. Experts say that such an increase will strengthen the long-term operating capacity of banks and financial institutions, withstand financial pressure during disasters or uncertainties, and increase the ability to easily meet regulatory standards.
The capital growth figures are remarkable, especially in commercial banks. According to the NRB, the paid-up capital of 20 commercial banks has reached Rs 385.32 billion as of Mid-June 2082. This is an increase of Rs 6.30 billion compared to Rs 379.02 billion in the same period last year.
Similarly, the paid-up capital of 17 development banks has also increased. Their combined paid-up capital has reached Rs 43.24 billion as of Mid-June 2018. This is an increase of Rs 853 million from Rs 42.17 billion in the previous year.
In the case of finance companies, the overall paid-up capital is also increasing. The paid-up capital of the finance companies currently in operation has reached Rs 15.27 billion by mid-June 2082. This is an increase of Rs 55 million compared to Rs 15.21 billion in the previous year.
With the increase in paid-up capital, the service access of banks and financial institutions is also expanding. So far, the number of branches of banks and financial institutions across the country has reached 6,518. Of these, 5,095 branches of commercial banks, 1,132 branches of development banks and 291 branches of finance companies are operational.
