Nepal Rastra Bank Governor Dr. Vishwanath Paudel has asked banks to offer cash dividends to shareholders instead of only bonus shares. He made this request during a discussion with CEOs of commercial banks.
According to Governor Paudel, the time has come to help the economy move forward. One way to do that, he said, is by distributing dividends that directly reach investors’ hands, helping them reinvest in the market and boost overall economic activity.
He urged banks to hold their annual general meetings (AGMs) quickly and decide on dividend distribution. More importantly, he recommended cash payouts over bonus shares, explaining that while bonus shares only increase a bank’s capital, they don’t benefit investors in the short term.
Paudel pointed out that for years, banks have offered low dividends, mostly in the form of bonus shares. This, he said, adds to the bank’s capital but leaves investors without real money. Cash dividends, on the other hand, can support spending and investment in new areas.
He also mentioned the difficulties promoters face in trading their shares, saying it’s become another problem. He believes rules around promoter share transactions need to be more flexible so the market can function more smoothly.
