Remittance inflow might see an increase as commercial banks can now open a liaison or representative office outside the country.
Commercial banks that have fulfilled the basic criterion according to the central bank’s rule can now open a representative or liaison office outside the country, Nepal Rastra Bank (NRB) said today.
They must, however, have minimum basic paid up capital, been maintaining one per cent more buffer capital since the last one year, have Non Performing Assets of less than five per cent for the last three years, and the central bank must not have penalized any of the directors within the last six months.
Those commercial banks that fulfill the criterion must first apply at the central bank with financials of the last three years, declaration of its capacity to abide by the regulation of the regulatory authority of the concerned country where they are willing to open a representative or liaison office, besides a feasibility study and the bank’s board decision, said Nepal Rastra Bank that will permit banks with time restriction, if the applicant fulfills all the criteria.
Commercial banks must get approval from the concerned country’s regulatory authority within six months and a final approval from the central bank to open a representative or liaison office that must come into operation within six months and they must inform the central bank.
“Commercial banks must take approval from the Foreign Exchange Department of the central bank for the foreign currency needed to open an office in a foreign country,” NRB added.
Commercial banks have been asking the government and the central bank to allow them to operate offices outside the country.
Some of the commercial banks have, even, been planning to open a liaison office in the key remittance originating countries like India to officially channel in remittance through banks. Though a World Bank report has projected remittance inflow growth rate to slow down, a large chunk of remittance inflow from India has not yet been completely utilized through formal banking channels making it difficult to track its contribution to the total remittance.
Recently, Global IME Bank had sought the central bank’s permission to open a liaison office in New Delhi, India, to channel the remittance inflow through the bank.
The Monetary Policy has also promised commercial banks to allow them to open offices outside the country, though earlier, the Unified Directives 2010 had allowed only licensed institutions established with foreign equity participation to open a liaison or representative office according to the conditions stipulated by the central bank.
Source: The Himalayan Times (Jan 31st, 2013)
Commercial banks that have fulfilled the basic criterion according to the central bank’s rule can now open a representative or liaison office outside the country, Nepal Rastra Bank (NRB) said today.
They must, however, have minimum basic paid up capital, been maintaining one per cent more buffer capital since the last one year, have Non Performing Assets of less than five per cent for the last three years, and the central bank must not have penalized any of the directors within the last six months.
Those commercial banks that fulfill the criterion must first apply at the central bank with financials of the last three years, declaration of its capacity to abide by the regulation of the regulatory authority of the concerned country where they are willing to open a representative or liaison office, besides a feasibility study and the bank’s board decision, said Nepal Rastra Bank that will permit banks with time restriction, if the applicant fulfills all the criteria.
Commercial banks must get approval from the concerned country’s regulatory authority within six months and a final approval from the central bank to open a representative or liaison office that must come into operation within six months and they must inform the central bank.
“Commercial banks must take approval from the Foreign Exchange Department of the central bank for the foreign currency needed to open an office in a foreign country,” NRB added.
Commercial banks have been asking the government and the central bank to allow them to operate offices outside the country.
Some of the commercial banks have, even, been planning to open a liaison office in the key remittance originating countries like India to officially channel in remittance through banks. Though a World Bank report has projected remittance inflow growth rate to slow down, a large chunk of remittance inflow from India has not yet been completely utilized through formal banking channels making it difficult to track its contribution to the total remittance.
Recently, Global IME Bank had sought the central bank’s permission to open a liaison office in New Delhi, India, to channel the remittance inflow through the bank.
The Monetary Policy has also promised commercial banks to allow them to open offices outside the country, though earlier, the Unified Directives 2010 had allowed only licensed institutions established with foreign equity participation to open a liaison or representative office according to the conditions stipulated by the central bank.
Source: The Himalayan Times (Jan 31st, 2013)
0 comments:
Post a Comment