Kathmandu, November 24
Although, Nepal Rastra Bank (NRB) has allowed development banks and finance companies to issue 25 percent debenture of its primary capital, they have not shown any enthusiasm regarding the debenture issue.
Previously, where the central bank had allowed commercial banks to issue 25 percent debenture of its primary capital, it allowed the same to development banks, finance companies and microfinance companies since this year.
The monetary Policy of this year states that ‘Apart from commercial banks, national level development banks, finance companies and retail microfinance companies are also allowed to issue 25 percent debenture of their capital.
Out of 7 national level development banks, Muktinath Bikas, Jyoti Bikas, Shangrila Bikas have already issued the debenture. Meanwhile, Garima Bikas and Kamana Sewa Bikas have sought SEBON approval for the issue. Only Mahalaxmi Bikas and Lumbini Bikas Bank havenot started the process for the same.
Among finance companies, only Manjushree Finance has opted for debenture issue for capital acquirement.
In the meantime, none of retail microfinance companies including Sana Kisan Laghubitta, First Microfinance, RSDC Laghubitta and RMDC Laghubitta have grabbed the opportunity.
Although, microfinance companies were demanding for the initiation of debenture issue by NRB before the issuance of Monetary Policy, they have not shown keenness for the same after the issue of the policy.
Basanta Lamsal, former chairman of Microfinance Bankers Association said that although NRB fulfilled their demand, fund collected through 25 percent debenture issue of companies having capital of mere Rs 100-200 million does not contribute much in the market which can be a big reason for the cold response from microfinance companies.”
In the FY 2077/78, 16 commercial banks, 4 development banks and one finance companies have obtained approval from SEBON to issue debenture. By the end of last FY, BFIs mobilized Rs 100.38 billion of funds through debenture issues.
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