Kathmandu. As per the provision, the minimum paid-up capital of the cooperative bank should be Rs 2.50 billion.
The central bank has issued a directive to the cooperative banks that have taken license to carry out limited banking transactions, 2082. Now, the minimum paid-up capital of such cooperative banks will be Rs 2.5 billion.
According to the directive, the capital of the cooperative bank should be made up of ordinary shares only. The co-operative bank should maintain 4 percent of its primary capital and 8 percent of its total capital on the basis of its total risk-weighted assets. Capital fund means primary capital and supplementary capital.
Loan or Loan Limit of Co-operative Bank
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The limit of loan or loan that a co-operative bank can provide to a single member or a group of members having a relationship shall be up to 15 percent of the total assets of the member institution or 20 percent of the total ordinary shares of the co-operative bank, whichever is less. If there is no outstanding loan or loan within this limit, the co-operative bank will have to set such limit by Ashad end, 2083 BS.
- A group of member institutions having a relationship with each other for the purpose of credit or credit and facility limit shall be deemed to be the same group in the following circumstances: Relationship means:
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(a) If any co-operative society has subscribed to another co-operative society pursuant to the Co-operative Act and has acquired 10 percent shares,
(b) If the husband or wife, son, daughter, adopted son, daughter, father, mother, step-mother and brother, brother and sister to be cared for by him or her are the directors of two or more cooperatives, such co-operative societies.
- In order to mitigate the overlapping risk arising from the grant of loans or loans above the limit mentioned in this Directive, a provision shall be maintained for a hundred percent loan or loan loss on the amount provided above the limit.
- In the loan without collateral approved or renewed after the effective date of this direction, the Co-operative Bank shall deposit a total of Rs. 1000/- on the collective guarantee of the Board of Directors of the member lending institution. Loans up to Rs 25 lakh can be issued. The maximum amount of loan disbursed in this way is Rs. Member borrowers will have to use the member loan only for the purpose of providing microloans up to Rs 5 lakh. Such loan or loan may be used only by members other than the director.
The Co-operative Bank may issue loans to its member borrower co-operatives only on the condition that they provide installment loans up to 80% of the total project cost as security of the project.TAG_OPEN_li_33
The co-operative bank may disburse a maximum of 90 percent loan to protect the savings of the member institutions.TAG_OPEN_li_32
The co-operative bank shall ensure that the borrowing capacity of the member institution is evaluated while issuing loans or loans.TAG_OPEN_li_31
Subject to the prevailing laws and directives, the co-operative bank may disburse a maximum of 10 percent of the total loan or loan in real estate and up to 25 percent of the total loan or loan in both real estate and residential home loan.TAG_OPEN_li_30
