Kathmandu: Pratima Shrestha, the largest shareholder of Everest Bank, will not receive dividends despite securing shares in her name from her late father after a long struggle.
Nepal Rastra Bank has directed Everest Bank to withhold dividends until Pratima reduces her ownership to within the legal 15 percent limit.
After veteran banker BK (Bishnu Krishna) Shrestha’s death at age 94, his daughter Pratima inherited shares worth around Rs 1.5 billion. However, Pratima already owned 14.77 percent of shares, and adding her father’s 9.18 percent increased her stake to 23.96 percent, exceeding the 15 percent limit set by the Banks and Financial Institutions Act (BAFIA).
NRB initially stopped the transfer due to legal constraints but later allowed gradual sale of Pratima’s shares so the total ownership would not exceed 15 percent. Despite this, NRB imposed a strict condition that Everest Bank cannot distribute dividends to Pratima until her ownership complies with the 15 percent threshold.
Everest Bank plans to distribute 6 percent bonus shares and 14 percent cash dividends from last fiscal year’s profit. Based on her current shares, Pratima stands to receive approximately Rs 431 million in cash dividends and an additional 1.86 million shares. However, the dividend payment is currently withheld due to the NRB’s directive.
NRB clarified that once Pratima reduces her ownership below 15 percent, she will be entitled to all withheld dividends. BK Shrestha was the chairman of Everest Bank from 1995 until his death. His shares were valued at approximately 1.5 billion NPR at current market prices.
The case highlights the tension between honoring the wishes of a deceased founder and complying with regulatory limits on bank ownership to maintain governance and control. Pratima faces a dilemma: she must sell shares to meet legal requirements but risks losing dividends until compliance is met.
The legal regulation preventing ownership over 15 percent aims to preserve fair governance in banks and avoid concentration of control. Pratima must reduce her stake to regain dividend rights fully.
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