Nepal SBI Bank share transactions suspended

Kathmandu | Updated: Dec 30 2008, 06:25am hrs
The Nepal Stock Exchange Authority has suspended transactions of shares belonging to Nepal SBI Bank, a joint venture of State Bank of India, the Employees Provident Fund and Agricultural Development Bank of Nepal, for distributing extra bonus to shareholders.

The Stock Exchange has ordered halting transactions of shares of the joint venture bank following the bank's decision to distribute 25% bonus shares to shareholders without going through procedures, which is taking shareholders' approval. The bank had earlier decided to distribute one share for two to shareholders under a rights issue.

However, Nepal SBI Bank chief financial officer Vinod Mishra says the bank has only proposed the bonus share after coming under tremendous pressure from shareholders and the decision is subject to approval from the Nepal Rashtra Bank, the apex bank of Nepal.

He hoped that the suspension on transactions will be withdrawn in a day or two after a clarification is submitted to the stock exchange authorities. The bank made a net profit of NRs 24.77 crore or $3 million, which is 2% less that last year's. The bank has an NRs 200 crore authorised capital and 22 branches in Nepal, including four opened last month. The bank is planning to open 11 branches including four in Kathmandu in January next year, Mishra said.