Kathmandu. The total paid-up capital of the banking sector of the country has reached more than Rs 4.5 trillion. According to the data released by Nepal Rastra Bank, the fiscal year 2081. The paid-up capital of 54 institutions including commercial banks, development banks and finance companies reached Rs 443.68 billion in the review period.
This is an increase of Rs 7.27 billion compared to the previous year. This shows that the banking sector is increasing its paid-up capital.
Paid-up capital is the amount of money a company or bank has raised from its shareholders. It is also known as the capital paid by the shareholders. Paid-up capital is considered to be the fundamental strength of a financial institution, which helps in managing losses, expanding the business, and giving credibility to the customers. Therefore, the paid-up capital is considered as a very important indicator for the stability and safe transactions of the banks and financial sector.
According to the Nepal Rastra Bank (NRB), commercial banks alone have maintained a paid-up capital of Rs 385.32 billion in the last fiscal year. In the last fiscal year, the paid up capital of commercial banks increased by Rs 6.30 billion compared to the previous year. In the previous fiscal year, the bank had a paid-up capital of Rs 3.79 trillion.
The paid-up capital of the development banks has also increased. In the last fiscal year, their paid-up capital reached Rs 43.02 billion. This is Rs 85.30 crore more than the previous year. In the previous fiscal year, it was Rs 42.17 billion.
The paid-up capital of the finance companies has reached Rs 15.30 billion. This is an increase of Rs 8.30 crore compared to the previous year. During the period, the paid up capital of the finance companies stood at Rs 15.21 billion.
Nepal’s banks and financial institutions are becoming stronger on the basis of paid-up capital. The overall banking system has become more trustworthy as the paid-up capital, which is considered crucial in building the risk bearing capacity of the financial sector, credit flow capacity and the confidence of the general service recipients, has increased significantly in recent times.
Even Nepal Rastra Bank (NRB) has been considering the paid-up capital as a very important indicator while evaluating the financial sound of the banks and financial institutions. On this basis, the country’s banks and financial institutions are in a strong position.
According to experts, the increase in paid-up capital will strengthen the long-term operational capacity of the banks and financial institutions, increase the financial pressure during disasters and uncertainty and easily meet the standards of the regulatory body.
The Rastra Bank especially in the financial year 2072. The policy of increasing minimum paid-up capital was adopted through the Monetary Policy of 73 BS. Following the Nepal Rastra Bank’s policy, banks and financial institutions (BFIs) have been increasing their paid-up capital. The paid-up capital of the banks and financial institutions increased from Rs 141.70 billion in mid-July 2015 to Rs 443.68 billion in the first 10 years.
The paid-up capital of commercial banks increased from Rs 98.30 billion in mid-July 2015 to Rs 385.32 billion in mid-July 2015. Similarly, the bank has increased its paid-up capital from Rs 27.60 billion in mid-July 2015 to Rs 43.02 billion as of Ashad 2082 BS. The paid up capital of the finance companies increased from Rs 15.80 billion in mid-July 2015 to Rs 15.30 billion in mid-July 2015.
