KATHMANDU, JUN 08 - 2013
Rastriya Banijya Bank and Nepal Industrial Development Corporation (NIDC) have started an initiative to sell their cross-holdings in Nepal Investment Bank and Nabil Bank respectively. The RBB has a total of 4.51 million units of promoter shares at the NIBL, while the NIDC has 1.24 million such shares at Nabil Bank.
Although private sector banks and financial institutions have already ended their cross-holding, these banks are yet to end theirs as per the central bank’s directive.
RBB CEO Krishna Prasad Sharma said the largest bank has formed a committee to determine the value of its promoter shares that remain in the Nepal Investment Bank Limited (NIBL).
“A team headed by a board director will determine the value soon and we plan to start selling our shares in the NIBL within this fiscal,” Sharma said.
On the other hand, a senior official of the NIDC said they are planning to issue a notice to sell their cross-holding at Nabil. “We have already sold 300,000 units of shares through auction in two phases,” said the NIDC official.
The central bank had directed banks and financial institutions to end cross-holdings as cross interest would prevent a competitive environment in the banking sector.
The NRB spokesperson said the central bank has asked them to end their cross-holdings as soon as possible. “They also cannot distribute dividend as per the central bank directive,” he said. However, the NIDC official said the NRB has exempted them from the dividend as it has continued selling the cross-holdings. “All the shares were not sold in the earlier attempts,” the official said.
In the case of RBB , it backtracked from selling its shares in the NIBL four years ago after the Securities Board of Nepal (SEBON) rejected the price it quoted. The RBB had quoted Rs 1,068 per share and SEBON had said that it was unjustifiable. At that time, the value of an ordinary share of the NIBL was around Rs 1,900.
Later, as the share prices plunged due to recession in the stock market, the RBB did not make an effort to sell its shares.
The value of NIBL’s public share was worth Rs 724 on Friday, which means that the RBB is likely to get far less than what it could have got four years ago. Usually, the value of promoter shares is kept less as compared to public shares.
Source: The Kathmandu Post
Rastriya Banijya Bank and Nepal Industrial Development Corporation (NIDC) have started an initiative to sell their cross-holdings in Nepal Investment Bank and Nabil Bank respectively. The RBB has a total of 4.51 million units of promoter shares at the NIBL, while the NIDC has 1.24 million such shares at Nabil Bank.
Although private sector banks and financial institutions have already ended their cross-holding, these banks are yet to end theirs as per the central bank’s directive.
RBB CEO Krishna Prasad Sharma said the largest bank has formed a committee to determine the value of its promoter shares that remain in the Nepal Investment Bank Limited (NIBL).
“A team headed by a board director will determine the value soon and we plan to start selling our shares in the NIBL within this fiscal,” Sharma said.
On the other hand, a senior official of the NIDC said they are planning to issue a notice to sell their cross-holding at Nabil. “We have already sold 300,000 units of shares through auction in two phases,” said the NIDC official.
The central bank had directed banks and financial institutions to end cross-holdings as cross interest would prevent a competitive environment in the banking sector.
The NRB spokesperson said the central bank has asked them to end their cross-holdings as soon as possible. “They also cannot distribute dividend as per the central bank directive,” he said. However, the NIDC official said the NRB has exempted them from the dividend as it has continued selling the cross-holdings. “All the shares were not sold in the earlier attempts,” the official said.
In the case of RBB , it backtracked from selling its shares in the NIBL four years ago after the Securities Board of Nepal (SEBON) rejected the price it quoted. The RBB had quoted Rs 1,068 per share and SEBON had said that it was unjustifiable. At that time, the value of an ordinary share of the NIBL was around Rs 1,900.
Later, as the share prices plunged due to recession in the stock market, the RBB did not make an effort to sell its shares.
The value of NIBL’s public share was worth Rs 724 on Friday, which means that the RBB is likely to get far less than what it could have got four years ago. Usually, the value of promoter shares is kept less as compared to public shares.
Source: The Kathmandu Post
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