NRB issues directives for Promoter share conversion
January 3 , 2019 | Investopaper
Nepal Rastra Bank (NRB) issued a revised directive on Poush 19, 2075 for promoter share conversion. The directive is related to the conversion of promoter share to ordinary shares of Banks & Financial Institutions (BFIs).
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The main point emphasized in the directive is to maintain a minimum 51% promoter holdings. The promoters can convert their shares to ordinary by maintaining at least 51% holdings in the company. Only 10% shares can be converted at a time. While converting the shares, the company should at least process 2 times for conversion of total shares. The main reason for this is to reduce the impact of share conversion on the capital market, banks & financial sectors.
To convert the promoter shares to ordinary shares, the company should have completed 10 years of operation. Once converted into ordinary shares, it cannot be reconverted to promoted shares.
In order to convert the promoter shares into ordinary, the permission from NRB is mandatory.
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