Nepal Rastra Bank (NRB) issued the Integrated Directive 2082 for ‘Class D’ microfinance institutions on Magh 2. The directive consolidates the Integrated Directive 2081 issued last year along with all circulars and amendments released up to Magh 2, 2082. As per existing regulatory provisions, NRB regularly issues directives to licensed banks and financial institutions as required, and such institutions are mandatorily required to comply with them.
The provisions related to rights share issuance have been incorporated under Directive No. 10/2082, Clause Nos. 14 and 15. Clause 14 states that microfinance institutions may issue rights shares with prior approval from Nepal Rastra Bank if they seek to increase capital or alter their capital structure, subject to conditions prescribed by the central bank. Clause 15 provides a detailed explanation regarding the sale of rights shares and clearly mentions that, with the objective of strengthening paid-up capital and capital funds through merger and acquisition processes to ensure reliable financial services, NRB will not grant approval for amendments to the memorandum and articles of association solely for issuing rights shares.
Nepal Rastra Bank clarified that this provision is not new. Identical clauses were already included under Directive No. 10/2081, Clause Nos. 14 and 15 of the Integrated Directive 2081 issued last year. The central bank has consistently emphasized merger and acquisition as the preferred approach for capital enhancement among microfinance institutions. According to senior officials from NRB’s Regulation Department, there has been no policy change regarding rights share issuance, and the bank continues to prioritize the development of financially strong institutions with robust and adequate capital bases through merger and acquisition rather than rights issues.
This article was originally published on https://bajarkochirfar.com. Translated with the help of AI and reviewed by our editorial team.
