But sadly, the oldest bank of the country failed to extract specific commitments from these honchos on recapitalization and other support it badly needs to fix its balance sheet and sustain as a viable financial entity.[break]
Present on the occasion were President Dr Ram Baran Yadav, newly-appointed Minister of State for Finance Hari Raj Khewa Limbu and Nepal Rastra Bank Governor Yuvaraj Khatiwada.
It was expected that these people would at least pitch recommendations on improving the financial health of the state-owned bank, which is in red due to chunk of bad debts accumulated till 2002.
But they disappointed many present on the occasion as they spent most of the time talking about its history and how it introduced banking culture in the country.
Governor Khatiwada did mention something about replenishing the bank´s capital, but he fell short of saying ´how´.
Established in November 1937, the bank is currently operating under direct supervision of Nepal Rastra Bank, the central bank, because of the bank´s frail financial health. It currently has a negative core capital of Rs 4.22 billion, meaning it must raise this amount to turn into a healthy commercial bank.
Recently, there were talks about injecting Rs 4 billion in the ailing institution, by issuing Rs 2 billion worth of rights shares and the rest by selling a part of its fixed asset. But the government is yet to finalize the recapitalization plan.
It is said the government is dragging its feet on the matter as it holds 40 percent stake in the bank and allowing the bank to issue rights shares means the state will be asked to buy the shares first, on which it will have to spend around Rs 1.5 billion.
At the event, Minister of State Limbu expressed interest in supporting the bank. Well, this is his opportunity as these days rights can also be sold to the third party.
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