NRB Cuts Shareholdings of 35 Karnali Development Bank Shareholders to Just 1%

A management group appointed by Nepal Rastra Bank (NRB) has reduced the shareholdings of 35 shareholders of Karnali Development Bank Limited to just 1% as part of the bank's restructuring process. The decision was taken after an assessment of the bank's assets and liabilities revealed that its paid-up capital had been completely wiped out, leaving the institution's assets insufficient to cover its liabilities. The management group also found that certain amounts contributed by shareholders toward rights shares and share capital had been subscribed illegally. According to a public notice issued by the management group, the shareholding reduction has been carried out under Section 86ङ (1), Clauses (च) and (ज), and Section 86ज of the Nepal Rastra Bank Act, 2058. The decision will be presented for a court hearing before being registered at the Office of the Company Registrar under Section 58 (2) of the Companies Act, 2063. The hearing has been scheduled for Mangsir 9 at 10:00 AM at the High Court Tulsipur (Nepalgunj Bench). Individuals or parties wishing to challenge the decision have been invited to appear before the court with supporting evidence. According to the management group, the shareholding reduction affects 35 shareholders, including 25 from the promoter group and 10 from the general public group. Under the revised structure, the total shares held by the promoter group have been reduced from 2,136,060.84 units to 21,360.61 units. Similarly, the holdings of the public shareholder group have been reduced from 12,684.98 units to 126.85 units. The move is part of the restructuring process initiated after the bank was found to have significant financial irregularities and insufficient assets to meet its liabilities. The management group's decision is expected to proceed through the required legal process before final registration.