NRB Bars Microfinance Promoters Holding Over 25% Stake From Receiving Dividends
NRB’s new directive says microfinance promoters with over 25% ownership will be ineligible for dividends unless they reduce holdings below the limit.
Kathmandu, Aug 27 (Nepalytix) — Nepal Rastra Bank (NRB) has moved to restrict dividend payouts to promoters of microfinance institutions holding more than 25% of paid-up capital, in a bid to enforce ownership diversification.
The central bank, through its newly issued “Procedure for Publishing Financial Statements and Approving Dividends of Banks and Financial Institutions, 2082,” has replaced the 2077 guidelines with stricter rules. Under the updated framework, promoters exceeding the 25% threshold must reduce their holdings before becoming eligible for dividend distributions.
The directive aims to prevent excessive concentration of ownership in microfinance companies, where dominant promoter stakes have often been criticized for weakening governance and limiting broader participation.
Analysts note the regulation could push promoters to offload shares in the secondary market, potentially increasing liquidity in the microfinance segment of NEPSE. At the same time, compliance will be closely monitored during annual general meetings, where dividend approvals are finalized.
NRB’s broader reform package also includes stricter reserve requirements, capital adequacy thresholds, and dividend approval conditions across banks, finance companies, and microfinance institutions — reflecting a tighter regulatory stance to safeguard financial stability.