29th July 2025, Kathmandu
Nepal Rastra Bank (NRB) has introduced a new directive titled “Dividend Distribution Guidelines 2082”. This guideline applies to non-banking payment service providers (PSPs) and payment system operators (PSOs), such as Nepal Clearing House, eSewa, Khalti, IME Pay, and Fonepay.
NRB Dividend Guidelines 2082
Six Key Conditions For Dividend Declaration
The NRB’s guideline includes six mandatory financial conditions that PSPs and PSOs must fulfill before distributing dividends:
No Negative Retained Earnings
Institutions must ensure that retained earnings are not negative during dividend declaration.
Dividend Only in Profitable Years
Companies can declare dividends only in years they make a profit. Loss-making years are not eligible.
No Cash Dividend from Share Premium or Bargain Purchase Gain
Use of share premium or bargain purchase gain for cash dividend is prohibited.
Net Worth Must Be Positive
A company must have positive net worth to distribute bonus shares.
Reserve Funds Are Mandatory
A portion of the profit must go to a Risk Bearing Fund and a General Reserve Fund. The risk fund is to cover unexpected losses.
No Major Inspection Issues
The company must not have serious financial irregularities identified during on-site or off-site NRB inspections.
Additional Provisions
NRB has also mandated that institutions establish an Infrastructure Development Fund. A fixed percentage of annual profit must be deposited into this fund. It can be used for upgrading the institution’s digital and technological infrastructure.
Purpose Of The Guideline
NRB stated that the main goal is to make dividend distribution more transparent and systematic. It also aims to ensure sustainable reinvestment and strengthen risk management capacity in PSPs and PSOs.
The guideline promotes financial discipline, increases operational efficiency, and contributes to building a safe, sound, and secure digital payment ecosystem in Nepal.
Policy Requirements
Institutions must formulate a dividend distribution policy based on this guideline. The board of directors must approve the policy. The policy should clearly cover:
Regulatory capital requirements
Rules for cash and share dividend distribution
Provisions for risk-bearing and general reserve funds
Percentage of profit to be allocated into each fund
All expenditures from these funds must be reported to NRB.
Specific Pre-Conditions For Dividend Declaration
To distribute dividends, the following conditions must be met:
Retained earnings should not be negative
Dividend must be based on the profit of that financial year
No use of share premium or bargain purchase gain for cash dividend
Net worth must be positive for share dividends
Sufficient cash must be available for cash dividends
Loan covenants must not restrict dividend payments
No serious issues should be found in NRB inspections
Institutions also require prior approval from NRB before publishing financial reports and dividend proposals.
Applicable Entities
This guideline applies to 9 licensed Payment System Operators (PSOs) and 22 licensed Payment Service Providers (PSPs) operating in Nepal.
Impact Expected
NRB expects the guideline to enhance transparency and governance. It also hopes that institutions will use their earnings more wisely and invest in future growth and infrastructure. In the long run, it aims to build a more robust, efficient, and secure digital payment system for Nepal.
For more:- NRB Dividend Guidelines 2082