More than half a dozen financial institutions are relieved as the
central bank has extended the obligatory period for them to issue shares
to the public.
From now on, financial institutions can go public within three years of coming into operation, according to the recent unified directives for fiscal year 2013-14, issued by Nepal Rastra Bank (NRB).
Earlier, the obligatory period to issue shares for the public was two years of coming into operation.
At present, there are eight financial institutions that are past the two-year deadline of issuing shares
to the public that will benefit from the extension of one more year. Century Commercial Bank, MT Makalu Development Bank, Surya Development Bank, Cosmos Development Bank, Manaslu Bikas Bank, Kalika Microcredit Development Bank, Mirmire Microfinance Development Bank and Janautthan Samudayik Microfinance Development Bank have already passed the deadline. But the amendment in the regulation has given these financial institutions enough time to go public.
“NRB had received requests from financial institutions that two years is a very short period to gain the trust of the public and issue shares to them, so we decided to extend it,” said spokesperson for NRB Bhaskar Mani Gyanwali.
Including these eight firms, there are 26 financial institutions in existence that are yet to issue shares to the public. Among them four — two development banks and two microfinance institutions — have already crossed three years of operation. In January 2010, NRB had warned of scrapping the licence of 15 financial institutions that had been delaying to go public.
NRB had introduced the mandatory provision for the public issue to increase more public participation in the decision making process of financial institutions that mobilise public money.
Among the financial institutions to go public, there are 13 microfinance development banks. Microfinance development banks launched quite popular initial public offerings (IPOs) in the last fiscal year. The recent IPOs of Rural Microfinance Development Bank, Sana Kisan Bikas Bank and Swarojgar Laghubitta Bikas Bank all were subscribed by more than 10 times. “By extending the time to issue shares, public will get a little more time to assess the financial institutions,” said share analyst Rabindra Bhattarai.
“Moreover, the issuer will also get a little bit more time to strengthen their portfolios and gain the trust of primary investors,” he added. The Securities Board of Nepal requires any issuing firm to have completed audit of one fiscal year’s undertaking in order to give permission to issue shares.
src : THT
From now on, financial institutions can go public within three years of coming into operation, according to the recent unified directives for fiscal year 2013-14, issued by Nepal Rastra Bank (NRB).
Earlier, the obligatory period to issue shares for the public was two years of coming into operation.
At present, there are eight financial institutions that are past the two-year deadline of issuing shares
to the public that will benefit from the extension of one more year. Century Commercial Bank, MT Makalu Development Bank, Surya Development Bank, Cosmos Development Bank, Manaslu Bikas Bank, Kalika Microcredit Development Bank, Mirmire Microfinance Development Bank and Janautthan Samudayik Microfinance Development Bank have already passed the deadline. But the amendment in the regulation has given these financial institutions enough time to go public.
“NRB had received requests from financial institutions that two years is a very short period to gain the trust of the public and issue shares to them, so we decided to extend it,” said spokesperson for NRB Bhaskar Mani Gyanwali.
Including these eight firms, there are 26 financial institutions in existence that are yet to issue shares to the public. Among them four — two development banks and two microfinance institutions — have already crossed three years of operation. In January 2010, NRB had warned of scrapping the licence of 15 financial institutions that had been delaying to go public.
NRB had introduced the mandatory provision for the public issue to increase more public participation in the decision making process of financial institutions that mobilise public money.
Among the financial institutions to go public, there are 13 microfinance development banks. Microfinance development banks launched quite popular initial public offerings (IPOs) in the last fiscal year. The recent IPOs of Rural Microfinance Development Bank, Sana Kisan Bikas Bank and Swarojgar Laghubitta Bikas Bank all were subscribed by more than 10 times. “By extending the time to issue shares, public will get a little more time to assess the financial institutions,” said share analyst Rabindra Bhattarai.
“Moreover, the issuer will also get a little bit more time to strengthen their portfolios and gain the trust of primary investors,” he added. The Securities Board of Nepal requires any issuing firm to have completed audit of one fiscal year’s undertaking in order to give permission to issue shares.
src : THT
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