Nepal Rastra Bank (NRB) has asked big banks to increase their capital fund by up to 1 percent.

लगानी न्यूज

९ मंसिर २०८२, मंगलवार १३:०१November 25, 2025

. KATHMANDU: Nepal Rastra Bank (NRB) has made it mandatory for systemically important banks to increase their capital. As per the central bank’s provision, such banks should now have an additional capital fund of 0.2 percent to 1 percent in their capital ‘higher loss absurdity’.

The Nepal Rastra Bank (NRB) has said that it has brought such a provision to maintain stability in the banking system and reduce systemic risks.TAG_OPEN_div_36 The new system issued by the Nepal Rastra Bank is the ‘Internally Systemically Important Bank Framework 2025’. This framework has been prepared specifically with a focus on large banks. This ensures that there is no problem in the overall financial system when any bank fails in the banking system.

According to the NRB, the framework is in line with the lessons learned from the 2008 global financial crisis and the good standards of the Basel Committee on Banking Supervision.TAG_OPEN_div_34 The framework has been focused on systemic risk control with the objective of ensuring that no bank is ‘too big to fail’ in the financial sector.

The

framework aims to identify systemically important banks, reduce systemic risks, enhance the sustainability of large and highly interconnected banks, and ensure proportionate and risk-based supervision. According to the framework, banks of systemically important banks will be identified through an index-based method. According to the framework, the weightage of the size of the four institutions will be 40 percent and the burden of interconnectivity will be 30 percent.

Similarly, the stability weight will be 15 percent and the complexity will be 15 percent.TAG_OPEN_div_30 These indicators will show the bank’s total exposure, asset liabilities within the financial sector, role in payment system, trading activities and cross-border transactions. Based on the systemic score received, the central bank has 0.5 It can add ‘Higher Loss Absorption’ capital from 20 to 1 percent. The increased capital will be effective from January 2083 ।