Nepal Rastra Bank introduces new dividend guidelines for companies like eSewa, Khalti, PhonePe, and Nepal Clearing House.
Nepal Rastra Bank (NRB) has issued a stricter framework for dividend distribution by payment service providers (PSPs) and payment system operators (PSOs), excluding banks and financial institutions. The central bank introduced the “Dividend Distribution Guidelines 2082”, aiming to enforce greater discipline among companies operating digital payment systems.
The guideline specifically applies to entities such as Nepal Clearing House, FONE PAY, and service providers like eSewa, IME Pay, and Khalti, among others.
According to the directive, only net profit from the current fiscal year can be used for dividend distribution. Companies with negative retained earnings will not be allowed to declare dividends, and dividend announcements must be strictly based on audited financial statements. Furthermore, cash dividends cannot be issued from share premiums or bargain purchase gains. Companies must also maintain sufficient cash reserves before declaring cash dividends. In the case of stock dividends, the company’s net worth must not be negative.
Before proposing any dividend, companies must submit several documents to NRB, including:
- Audited financial statements
- Board of Directors’ resolution
- Tax clearance certificate for the previous fiscal year
- Proof of no outstanding bank loans
- Confirmation of not being listed in the Credit Information Bureau’s blacklist
In addition, the guidelines mandate that PSPs and PSOs establish and maintain two key reserve funds:
- Risk-Bearing Fund – to manage unexpected financial risks
- General Reserve Fund – to support long-term financial stability
Companies are required to allocate a fixed percentage of annual profits into these funds every year.
Furthermore, NRB has directed payment system operators to establish an Infrastructure Development Fund, which will also be financed from annual profits. This fund must be used solely for infrastructure expansion, and companies are required to report any expenditure from it regularly to NRB.
This article was originally published on https://bajarkochirfar.com. Translated with the help of AI and reviewed by our editorial team.
