August 4: Bank of Kathmandu Lumbini is planning to issue right shares in a bid to meet paid-up capital of Rs 8 billion as directed by Nepal Rastra Bank (NRB). The bank, shaped after the merger of Bank of Kathmandu (BOK) and Lumbini Bank, has raised the paid-up capital substantially. Thus, BOKL is preparing to meet the remaining paid-up capital through internal resources.  According to the NRB directive, ‘A’ listed commercial banks must meet Rs 8 billion paid-up capital cap within the end of current FY.

“BOKL is preparing to issue right shares in order to meet the remaining paid-up capital after issuing bonus share from the profit of the last FY and the current FY,” said Prabin Prakash Chettri, Chief Operation Officer and Spokesperson of the bank. “After issuing bonus share from the profit of both banks, we will have Rs 7 billion paid-up capital. The remaining Rs 1 billion paid-up capital will be achieved through issuance of right shares,” he added. He also said that a bit of amount will be added to the paid-up capital while adjusting share ratio among the bank promoters.

With the end of the last FY, the paid-up capital of the bank has accumulated to Rs 4.97 billion. Earlier, Bank of Kathmandu (BOK) and Lumbini Bank had Rs 2.67 billion and Rs 2.30 billion paid-up capitals respectively. It also contains bonus share distributed by the both banks during the last year.

Previously, board of directors (BOD) meeting of BOK had distributed lucrative bonus share to its shareholders to achieve the paid-up capital of Rs 2.67 billion. Similarly, Lumbini Bank had also distributed bonus share to its shareholders to increase paid-up capital from Rs 2 billion to Rs 2.30 billion. The merged banks BOK and Lumbini Bank are in 21st and 18 ^th years of operation.  “The merger is the first of its kind as two of the old banks have merged with each other. The merger of two old banks has generated a single strong commercial bank constructing the base of reliable economy,” Chettri said.

The bank has aimed of making positive contribution in the country’s financial reach with the increased size and risk bearing capacity after merger.  BOK and Lumbini Bank had started integrated transaction from July 15. The number of branches of the BOKL has reached 74 after the merger.