Kathmandu. Out of the five operating commercial banks, they will not be able to pay cash dividend to the shareholders from the last fiscal year's profit. According to the unrevised financial statements published by the bank, Civil, Laxmi, Machhapuchhre, NIC Asia and Prabhu Bank will not be allowed to distribute cash dividends. However, if the condition of these banks improves or the condition of other banks deteriorates when the financial statements of mid-July come out, the number and name of the banks that will be able to pay cash dividend may change.

As per the directive issued by Nepal Rastra Bank, the capital adequacy ratio (CAR) of banks for distribution of cash dividends is more than 12 percent. Banks that do not have a CAR of 11 percent are not allowed to distribute dividends. Banks with a CAR of less than 12 percent and more than 11 percent are required to pay cash dividends and remaining bonus shares only for tax purposes.

According to the NRB, Civil, Laxmi, Machhapuchhre, NIC Asia and Prabhu Bank will not be allowed to pay cash dividends. However, these banks will also be able to pay cash dividends for tax purposes by giving bonus shares.

According to the unaudited financial statements of the last financial year published by the banks, the CAR of Civil Bank is 11.43 percent. Similarly, Laxmi has 11.72 per cent, Machhapuchhre 11.75 per cent, NIC Asia 11.44 per cent and Prabhu Bank 11.53 per cent. Therefore, if the financial statements up to mid-July do not show more than 12 percent CAR, these banks will not be able to distribute cash dividends.