NRB Permits Microfinance Firms to Distribute Up to 25% Dividend Based on Capital Adequacy and NPL Ratios
Summary
Nepal Rastra Bank allows microfinance institutions to distribute dividends up to 25% based on capital adequacy and NPL ratios, with certain conditions to ensure financial stability.
Key Points
- Nepal Rastra Bank permits microfinance firms to distribute dividends up to 25% based on capital adequacy and non-performing loan (NPL) ratios.
- Institutions with capital adequacy above 12% and NPL below 5% can distribute dividends up to 25%.
- Firms with lower capital adequacy ratios but NPL below 5% have dividend distribution limits reduced to 20% or 15%.
- Microfinance institutions must have a minimum 9% capital adequacy ratio to distribute cash dividends, and those with NPL over 15% cannot distribute dividends.
