The Nepal Rastra Bank (NRB) issued a directive on Thursday to make new arrangements to increase transparency in the process of purchasing and transferring founder shares of banks and financial institutions.
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Now, when purchasing or transferring founder shares worth more than 5 percent of the paid-up capital or Rs. 2.5 million in banks and financial institutions at one time or repeatedly, detailed details of the actual owner and beneficiary must be submitted to the Rastra Bank.
The Rastra Bank has issued a directive on Thursday to increase transparency in the process of purchasing and transferring founder shares of banks and financial institutions.
In the directive, the Rastra Bank has made a provision to obtain the name, address, family details, self-declaration that the share buyer or beneficiary has fulfilled the legal criteria related to the business, and details of the actual owner. Even if these details are initially obtained by the bank and financial institution, they must also be submitted to the Rastra Bank.
The directive also provides for disclosure of details including whether or not the person is involved in any offense in Nepal or abroad, whether or not the person is under litigation, investigation or administrative action, and whether or not the person has outstanding government arrears and revenue liabilities.
‘The situation of being blacklisted in debt, situations where there may be a conflict of interest, assets abroad and the actual owner or beneficiary of any asset must also be disclosed through self-declaration,’ the directive states. ‘The NRB has also made it mandatory to provide details of the past work experience of the person concerned, the organization involved, responsibilities, awards, punishments and financial conduct.’
The directive also provides that in the case of a shareholder organization, the details of the actual owner or beneficiary who directly or indirectly invests 15 percent or more in the organization, either individually, jointly or collectively. This provision is not limited to new investors but also applies to shareholders who currently hold 5 percent or more of the founder shares of banks and financial institutions and their actual owners, the NRB directive states.
