Karnali Development Bank Reduces Share Capital to 1% Following NRB Restructuring Mandate

30th October 2026, Kathmandu

Management Committee formed by Nepal Rastra Bank for the troubled Karnali Development Bank Limited has issued a public notice regarding the reduction of share capital for specified promoter and general shareholders down to 1 percent.

Karnali Bank Share Capital Reduced

Background and Legal Basis

Following the declaration of Karnali Development Bank Limited as a troubled institution on Poush 10, 2081, a Due Diligence Audit (DDA) conducted by the appointed management team revealed severe capital erosion, where liabilities exceeded assets, alongside illegal capital contribution practices.

• Regulatory Mandate: Acting under Section 86F, Sub-section (1), Clauses (F) and (G), and Section 86J of the Nepal Rastra Bank Act, 2058, the central bank ordered the reduction of shareholding for listed shareholders to 1 percent.
• High Court Ruling: Pursuant to the order issued by the High Court Tulsipur, Nepalgunj Bench on Kartik 11, 2083, a formal hearing is scheduled for recording reduction of share capital at the Office of the Company Registrar under Section 48, Sub-section (2) of the Companies Act, 2063.
• High Court Hearing Schedule: Mangsir 9, 2083 (November 24, 2026), Tuesday at 10:00 AM at the High Court Tulsipur, Nepalgunj Bench. Stakeholders wishing to present claims or objections are required to attend with evidence.

Summary of Share Capital Reduction

Promoter Shareholders (Founders)

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• Previous Share Count: 2,136,060.84 units
• Reduced Share Count (1%): 21,360.61 units

Public (General) Shareholders

• Previous Share Count: 12,684.98 units
• Reduced Share Count (1%): 126.85 units

Key Individual and Entity Holdings (Selected Highlights)

• Rajendra Veer Ray: Reduced across multiple holdings, including a major block from 753,404.00 units to 7,534.04 units.
• Sunilo Investment Pvt. Ltd.: Reduced from 753,211.00 units to 7,532.11 units (Promoter) and 4,928.40 units to 49.28 units (Public).
• Pashupati Dayal Mishra: Major promoter block reduced from 77,910.00 units to 779.10 units.
• Tara Gurung: Founder block reduced from 4,456.05 units to 44.56 units.

For More: Karnali Bank Share Capital Reduced