Kathmandu. Kathmandu: Governor Dr Bishwanath Poudel has decided to amend the strict policy related to dividend of microfinance brought by former Governor Maha Prasad Adhikari. Governor Dr Poudel is preparing to review the provision of depositing money in various funds to distribute more than 15 percent dividend to microfinance institutions.
TAG_OPEN_div_28 Nepal Rastra Bank (NRB) in point no. 104 of its monetary policy for the current fiscal year has said, “The existing arrangement regarding distribution of dividend (cash or bonus) of more than 15 percent annually by microfinance institutions will be reviewed as per the existing arrangement.” Nepal Rastra Bank (NRB) sources said that this arrangement will be made within six months of the next fiscal year and the dividend capacity of the microfinance companies will increase in this financial year itself.
TAG_OPEN_div_26 Rastra Bank has revised the provision and allowed microfinance companies to distribute dividends directly from profits without depositing money in various funds. At present, if the microfinance institution distributes more than 15 percent dividend from the profit earned during the financial year, the company has to deposit 50 percent of the profit earned by it in the general reserve fund.
Similarly, microfinance companies will have to deposit 35 per cent of the proposed dividend above 15 per cent to the Customer Protection Fund and 10 per cent to the Corporate Social Responsibility Fund. TAG_OPEN_div_24 Rastra Bank sources said that some things will be changed in the provision of allocating more than 15 percent dividend to the general reserve fund as announced through the monetary policy.
According to sources, work is underway on how to review. Microfinance companies have to submit the audit report of the financial statements of the last fiscal year within four months of the implementation of the current fiscal year. Rastra Bank sources claim that the Rastra Bank is preparing to change the policy of 15 percent cap after investigating the audit report submitted by the microfinance company to the Rastra Bank.
‘ How much money has been deposited in the general fund of microfinance by the Rastra Bank of the financial institution? It will look into it and preparations are being made to review it on the basis of the amount deposited in such fund. Rastra Bank sources say, “The dividend of microfinance is reviewed from the dividend distributed from the profit of the microfinance company for the last fiscal year 2081-82. ’
According to TAG_OPEN_div_18 the Country’s Companies Act 2063, a public company must hold a general meeting within six months of the end of the financial year. According to the Banks and Financial Institutions Act 2073 BS, banks and financial institutions have to submit financial statements to the central bank within three months of the end of the financial year. Similarly, the audit report has to be prepared within four months of the end of the financial year and submitted to the central bank within 15 days.
Similarly, any bank and financial institution has to send a proposal for dividend distribution to the Nepal Rastra Bank while distributing dividend. TAG_OPEN_div_16 Only after the Rastra Bank approves the dividend proposal of the banks and financial institutions, the organization can proceed with the remaining process of dividend distribution. Rastra Bank sources claim that the policy will be reviewed by the time the microfinance company completes the process.
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