Nepal Rastra Bank has implemented new procedure to approve dividends of licensed banks and financial institutions. In order to bring uniformity in the process of making the annual accounts public and giving approval, the NRB has implemented the Procedure 2077 regarding consent to publish financial statements and approval of dividends for the purpose of annual general meeting of licensed banks and financial institutions.

Accordingly, the distribution of cash dividends and bonus share dividends will be stopped until the licensed banks and financial institutions sell the founder share investment (cross holding) made in other licensed banks and financial institutions.

Banks and financial institutions will be allowed to declare cash dividend of only 30 percent of the net distributable profit of the last fiscal year.

Institutions with net distributable profit less than 5 percent of the total paid up capital will not be allowed to distribute cash dividend except for tax purposes. Institutions that fail to maintain the average monthly interest rate differential will be barred from declaring and distributing cash dividends on bonus shares other than for tax purposes.