2023-24

ANNUAL 1
REPORT 2023-24
 Siddhartha Bank is dedicated to empowering youth by integrating financial literacy, innovation, and entrepreneurship support into its core
operations. This commitment is deeply embedded in the Bank’s strategic vision, shaping key initiatives that provide young individuals with the
tools, resources, and opportunities to achieve financial independence and success. By prioritizing youth development, the Bank ensures that
its programs align with long-term economic growth, fostering a generation that is financially savvy, socially responsible, and equipped to drive
positive change.

With a steadfast focus on youth empowerment, Siddhartha Bank integrates tailored financial solutions and educational initiatives programs into
its operations. By channeling resources into youth-centric financial products and digital banking innovations, the Bank not only supports young
entrepreneurs and professionals but also nurtures a more dynamic and inclusive economy. Furthermore, by promoting ethical banking and
responsible financial management, Siddhartha Bank aims to create lasting value for young stakeholders, drive long-term career and business
growth, and contribute to a more resilient and opportunity-rich financial ecosystem for the leaders of tomorrow.

ANNUAL
2 REPORT 2023-24
ABOUT INTEGRATED ANNUAL REPORT
This integrated Annual Report offers stakeholders a detailed overview of Siddhartha
Bank’s financial and non-financial standing, along with its long-term value creation
strategies. It highlights the Bank’s core activities, strategic priorities, risk exposures,
mitigation measures, governance framework, financial performance, and other
key indicators. This report also presents information on factors that significantly
influence the Bank’s value creation and may influence the decisions of financial
capital providers.

ANNUAL 3
REPORT 2023-24
 Overview of the Bank 2

TABLE OF CONTENTS Vision and Mission

Core Values
2

Strategic Focus 4
1-53 Pillars and Objectives of Strategy 5
ORGANIZATION OVERVIEW
Code of Conduct 5

5-year Snapshot of Bank’s Performance 6

55-91 Financial Highlights 10

MANAGEMENT REPORT
Dupont Analysis 13

Horizontal Analysis 14

Vertical Analysis 17
93-123
SUSTAINABILITY REPORT Non-Financial Highlights 19

Milestones 20

Awards and Accolades 22

125-149 Corporate Structure 25
RISK MANAGEMENT REPORT
Organization Structure 26

Board of Directors 28

151-177 Director’s Profile 30

CORPORATE GOVERNANCE
Executive Committee 32

Capitals and its Risk Management Practices 34

179-195 Value Creation Model/Business Model 34

INVESTOR INFORMATION Key Business Areas/Products and Services 40

Chairman’s Message 44

CEO’s Message 47
197-208
HUMAN RESOURCE Customer Success Stories 50

Economic Outlook 56

Review of Bank’s Performance 60

209-315 CREDIT RATING AND FINANCIAL Non Financial Performance of the Bank 64
STATEMENTS OF SBL Review of Business Segments 67

External Factors Affecting Performance of the Bank 69

316-359 Organization Strategy on Market Development,

FINANCIAL STATEMENTS OF SCL Product and Service Development 70

Key Performance Indicators to Measure Achievement

Against Strategic Objectives 72

360-365 SWOT Analysis 73

RELATED COMPANIES
AND BRANCH NETWORKS PESTLE Analysis 74

Value Added Statement 76

ANNUAL
4 REPORT 2023-24
Economic Value-Added Statement 77 Disclosure of Risk Reporting 143

Fair Value Hierarchy 78 Annual Statement on Environmental and Social

Risk Management for FY 2023-24 148
Maturity Pattern of Assets and Liabilities 79
Board Level Committees 153
Loan Classification and NPA Disclosure 81
Chairman’s Review Report on the Overall
Details of Accounts Restructured as per Regulatory Performance of the Board 161
Guidelines 82
Board’s Performance Evaluation Process 163
Details of Credit Concentration/Sector Wise Exposures 83
Management Level Committees 164
Compliance with the Priority Sector Lending Norms 84
Details As Per Section 109 of the Companies Act, 2006 171
Details of Non-Statutory Investment Portfolio 85
Auditor’s Certificate Pursuant to Corporate
Disclosures for Derivative Investments 85 Governance Guidelines 175
Disclosure of Sale/ Transfer of Securities to/from HTM Annual Compliance Report on Corporate Governance 176
(Held to Maturity Category) 86
Structure of Share Capital 180
Market Share Information 86
Details of Shares Held by Directors, Their Immediate
Digital Footprint 88 Family Members and Senior Management Officials 183
Sustainability at a Glance 94 Representation In the Board of Directors 184
Message from the Environment and Social Focal Person 96 Notice of AGM 185
Bank’s Sustainability Strategy 99 Right to Information and Grievance Management 187
Sustainability Report for FY 2023-24 101 Shareholder’s Information Dashboard 190
Banking Operation and Banking Business Towards Share Price Sensitivity Analysis 191
Achieving SDG Goals 106
Reporting of Corporate Benefits to Shareholders 192
Governance and Sustainability 111
Implementation of Suggestions Provided by Shareholders 193
The Bank’s Contribution to National Economy 113
Human Resource Dashboard 198
Contribution of the Bank Towards Employee Health
and Safety 114 Staff Engagement Activities 201

Corporate Social and Environment Policy 114 Performance Management System 205

Carbon Disclosure Report 115 Remuneration and Benefits 205

Corporate Social Responsibility 117 Succession Management Process 205

Business Ethics and Anti-Corruption Measures 120 Bank’s Contribution to Employee Health
Safety and Well Being 206
Customer services and Grievance Redressal Mechanism 122
The Bank’s Credit Rating 209
Information/Disclosure on ISO certification 123
Audit Report of Siddhartha Bank 215
Message from the Chief Integrated Risk Officer 126
Financials of Siddhartha Bank 220
Risk Management Framework 130
Subsidiary Company-Siddhartha Capital 317
Bank’s Risk Governance Structure 132
Audit Report of Siddhartha Capital 318
Risk Control and Mitigation Methodology 133
Financials of Siddhartha Capital 321
IT Systems and Controls Including Data Privacy
and Cyber Security 140 Information About Related Companies 360

Assurance on Internal Controls of the Bank 140 Branch Networks 361

Major Uncertainties Faced by the Bank and Risk Mitigation

Strategies 141

ANNUAL 5
REPORT 2023-24
 ANNUAL
6 REPORT 2023-24
ORGANIZATION
OVERVIEW

ANNUAL 1
REPORT 2023-24
 OVERVIEW OF
THE BANK
Established as the 17th commercial bank of Nepal in 2002, we lasting relationships. Our partnership with our subsidiaries
are a leading commercial bank, positioning ourselves as a and related companies in the field of Merchant Banking, Life
digital-first, customer-centric bank with a strong focus on and Non-Life Insurance enables us to offer comprehensive
sustainability. We are committed to leveraging the power financial solutions to our valued customers.
of technology to offer superior banking solutions to our
customers digitally as well as physically. Our strong correspondent banking network, spread all over
the world, enables us to effectively support trade finance,
At Siddhartha Bank, customers are at the center of inward remittances, and international payment services. We
every decision we make, and we strive to meet their are committed to environmental stewardship and social
comprehensive banking needs with an extensive array of responsibility, placing a high priority on Environmental, Social,
products and services. With our diverse range of products/ and Governance (ESG) in our operations and financing. This
services catering diverse clientele, digital banking product/ commitment aims to create a sustainable long-term value
services, wide network of branches and ATMs and superior for our customers, employees, and the planet. We are aware
customer service, we have been able to position ourselves of the consequences of our actions and are devoted to
as the preferred banking partner in Nepal while nurturing fostering a sustainable future for all.

VISION MISSION
To be the digital first Customer delight by
bank for sustainable offering diverse products
growth. and services digitally for
stakeholder’s prosperity
and sustained growth.

ANNUAL
2 REPORT 2023-24
CORE VALUES
SUSTAINED GROWTH TRANSPARENCY INNOVATION
Siddhartha Bank is focused on The Bank aims to create a Siddhartha Bank aims to encourage
partnering with its stakeholders to transparent and open work innovative thinking at all levels of the
create sustainable growth for all. culture in the organization. The organization and expects employees
The Bank commits itself to ensuring Bank endeavors to ensure that to think of continuous improvements
that it adopts leading banking all its processes and policies in their day-to-day work. In return,
practices combined with market are geared towards improving Siddhartha Bank also endeavors to
leading innovation to ensure this transparency in the organization. create a supportive environment
sustainable growth. The Bank also The Bank also encourages open in the organization which can help
recognizes that sustained growth communication throughout the breed innovation.
has to be matched with appropriate organization, especially top-
risk management policies and down communication, to create CUSTOMER CENTRICITY
commits itself towards managing a participative decision-making Siddhartha Bank expects its
operational and financial risks. The process. employees to be driven by an
Bank also expects its employees unwavering focus on serving the
to ensure that they develop an INTEGRITY customer. Employees are expected
understanding of risks and follow Banking is a business entrusted to keep customer interests at the
the guidelines for risk management. with fiduciary responsibilities. In forefront in all the decisions they take
Siddhartha Bank also believes view of this, the Bank expects its in their work. Customers include the
in providing equal opportunity employees to maintain the highest external and internal customers of
of growth and learning for its standards of integrity in all their the Bank.
employees. The Bank also expects dealings within the organization.
its employees to take ownership of The Bank’s processes and policies
their progress within the Bank. The shall be designed in such a way that
bank believes that all its processes integrity becomes a way of life for
must be geared towards providing all its employees.
equality in opportunity for all
employees. We want to create
‘Relationships Forever’.

ANNUAL 3
REPORT 2023-24
 STRATEGIC FOCUS
SUSTAINABILITY
OBJECTIVES FOCUS AREAS
GOALS

Be the Digital Invest in emerging

First Bank in technologies like
Nepal, offering AI and blockchain,
comprehensive digitize business
DIGITAL FIRST banking services processes, and
digitally to improve service
enhance customer quality using big
convenience. data.

Diversify into new Expand in MSME,

markets, products, retail sectors,
and customer and card-based
DIVERSIFICATION segments to remain business. Target
OF BUSINESS competitive and diverse customer
profitable. segments based on
gender, age, and
locality.

Integrate Invest in renewable

environmental, energy, sustainable
social, and agriculture, green
economic factors to infrastructure, and
promote sustainable responsible social
SUSTAINABILITY development initiatives. Promote
and community diversity, inclusion,
resilience. and ESG for green
financing and
financial inclusion.

Provide exceptional Reengineer business

customer service processes, digitalize
SERVICE to build long-term interactions, and
EXCELLENCE relationships and continuously train
strong brand loyalty. staff for seamless
service delivery.

Create value for Enhance return

all stakeholders— on equity for
customers, shareholders,
employees, improve employee
STAKEHOLDER’S
shareholders, and benefits, contribute
PROSPERITY to community
society—while
ensuring long-term welfare via CSR, and
success. ensure transparent
governance and
compliance for
regulators.

ANNUAL
4 REPORT 2023-24
 PILLARS &
OBJECTIVES OF
STRATEGY

PILLARS OBJECTIVES

Human Capital Agile Organization

Information Technology Advanced & Secured Technology

Scale up Intelligence for Product Research, Development

Marketing & Data Analytics
and Promotion

Business Reengineering Diversification of Risk and Return

Compliance & Risk Management Proactive Compliance and Risk Management

Environmental, Social & Governance Responsible Banking

Process Reengineering Lean Processes

CODE OF CONDUCT
Siddhartha Bank Code of Conduct is designed to uphold  Employees should refrain from any type of political
the highest standards of ethics and professionalism within activities during the service period. However, each
the organization. It establishes the minimum behavioral employee is free to cast vote according to their interest
expectations for all employees and clearly defines both and choice.
acceptable and unacceptable conduct. Employees are
required to adhere to the principles and guidelines set forth  Employees should maintain respect, politeness and
in this policy. kindness to all senior as well as subordinate staff
following professional manner.
The Bank expects its employees to serve as representatives
of its culture, values, and integrity, maintaining a strong  Any employee is strictly prohibited to engage in any type
ethical work environment. With a deep sense of pride in of bribery and corrupt practices.
its legacy, Siddhartha Bank encourages its employees to
uphold and carry forward its traditions and reputation.  Employees must adhere to tenets of fairness, ethics and
personal integrity in all the financial and non financial
 No employee shall use confidential information about matters.
the Bank or its customers for his/her personal gain. All
employees should maintain confidentiality with respect to  Proprietary rights on all work including ideas, concepts,
Bank’s financial and non-financial information including creations, inventions or any other intellectual and/or
information on board meeting decisions, internal reports, industrial property created or produced by employee in
electronic communications on Bank’s strategy and other the course or as part of official duty will be vested to the
confidential information. Bank.

 Any act of discrimination and sexual harassment against  Employees should avoid any activity which creates
colleagues, customers or service providers shall not be conflict of interest with the Bank.
tolerated at the Bank.
 Employees should furnish and disclose required property
 The employees must know and follow the requirements details as directed by regulatory authorities.
set forth in the Bank’s AML/CFT policies.
 The Bank is committed to the highest standards of ethics
 Employee shall not act in any form to harm the prestige, and integrity in all its dealings between its employees,
image and interest of the Bank. with customers, and all other stakeholders.

 Smoking, consumption of alcohol or drugs in the office

premises and official vehicles are strictly prohibited.

ANNUAL 5
REPORT 2023-24
 5-YEAR SNAPSHOT OF
BANK’S PERFORMANCE
NPR in Million
PARTICULARS 2023-24 2022-23 2021-22 2020-21 2019-20

Balance Sheet Matrix

Authorized Capital 16,000.00 16,000.00 16,000.00 16,000.00 10,500.00

Paid up Capital 14,089.98 14,089.98 12,524.43 10,962.30 9,787.77

Reserve Funds and Surpluses 13,979.31 11,216.61 9,073.45 9,439.51 6,223.50

Total Shareholders’ Equity 28,069.29 25,306.59 21,597.87 20,401.81 16,011.27

Deposits 244,907.24 228,568.33 196,483.98 185,197.10 14,594.79

Loans and Advances 203,538.04 190,874.67 186,090.00 165,646.45 127,496.29

Investments 57,476.96 69,655.72 59,647.28 45,521.55 25,213.53

Fixed Assets 3,495.83 3,548.09 3,077.07 1,451.93 1,422.34

Total Assets 297,341.42 285,951.09 264,327.02 229,068.03 170,585.16

Total Off Balance Sheet Items 35,968.27 47,603.41 41,154.3 40,226.2 28,187.19

Income Statement Matrix

Interest Income 25,716.03 27,660.00 20,677.56 14,949.21 15,432.15

Interest Expenses 17,785.96 19,486.42 14,080.72 9,439.00 9,858.01

Investment Income 239.84 202.70 442.93 777.64 511.72

Non-Interest Income 2,196.44 2,029.41 2,038.08 2,379.46 1,235.42

Operating Expense 4,441.68 4,217.69 3,917.94 3,503.02 3,315.90

Total Income 28,163.58 29,905.58 23,167.18 18,106.85 17,179.50

Total Expenditure 22,636.69 24,152.76 18,301.24 13,146.54 13,364.44

Operating Profit 4,484.50 4,652.98 4,266.55 4,166.73 3,167.65

Profit Before Tax 4,475.77 4,565.26 4,258.47 4,167.24 3,128.64

Net Profit After Tax 3,080.03 3,166.77 2,902.46 2,854.83 2,143.61

Capital Measures

Risk Weighted Assets 243,138.73 232,358.79 216,336.27 196,267.97 153,630.16

Core Capital (Tier-I) 22,800.53 21,782.52 19,557.92 16,725.92 14,231.78

Supplementary Capital (Tier-II) 6,095.76 7,203.05 8,560.60 9,495.15 6,008.67

Total Capital 28,896.29 28,985.56 28,118.52 26,221.07 20,240.45

Capital Surplus/(Deficit) over Minimum Capital 2,151.03 3,426.10 4,321.53 4,631.59 3,341.13

Capital Surplus/(Deficit) over Counter Cyclical

935.33 - - - -
Buffer

Tier I Capital Ratio 9.38% 9.37% 9.04% 8.52% 9.26%

Tier II Capital Ratio 2.51% 3.10% 3.96% 4.84% 3.91%

Capital to Risk Weighted Asset Ratio Basel-III 11.88% 12.47% 13.00% 13.36% 13.17%

Leverage Ratio 6.88% 6.53% 6.38% 6.23% 7.10%

Net Worth 27,923.15 25,140.59 21,526.38 20,320.31 15,909.29

ANNUAL
6 REPORT 2023-24
PARTICULARS 2023-24 2022-23 2021-22 2020-21 2019-20

Credit Quality

Classified Loans 4,417.87 3,831.80 1,996.71 1,649.54 1,752.27

Provision for Unclassified Loans 3,086.18 2,972.90 2,670.43 2,380.10 1,322.26

Provision for Classified Loans 2,934.90 1,996.78 1,111.96 794.82 1,059.59

Provision for Contingent Liabilities - - - - -

Percentage of NPLs to Total Loans and Advances 2.17% 2.01% 1.07% 1.00% 1.37%

Operating Profit Ratios

Credit Deposit Ratio 84.63% 84.94% 96.08% 90.6% 89.04%

Spread 3.99% 3.99% 4.37% 3.7% 4.81%

Return on Assets 1.06% 1.15% 1.18% 1.43% 1.33%

Return on Equity 11.54% 13.50% 13.82% 15.68% 13.81%

Debt Equity Ratio 62.80% 74.98% 58.73% 40.01% 32.24%

Performance Ratios

Profit per Employee 1.55 1.61 1.53 1.53 1.14

Operating Profit to Average Assets 1.51% 1.66% 1.71% 2.06% 1.99%

Net Interest Income to Average Assets 2.67% 2.92% 2.64% 2.72% 3.50%

Burden Coverage Ratio 50.43% 48.89% 59.02% 85.15% 50.39%

Expense Coverage Ratio 124.48% 124.28% 126.66% 137.73% 128.92%
Interest Income to Total Income 91.31% 92.49% 89.25% 82.56% 89.83%

Fees and Commission Income to Total Income 6.45% 5.66% 6.50% 7.38% 6.25%

Cost to Income/ Efficiency Ratio 46.6% 43.9% 46.3% 42.8% 47.4%

Dividend & Rights Issue

Cash 4.00% 4.21% 0.66% 0.75% 3.00%

Stock 0.00% 0.00% 12.50% 14.25% 12.00%

Total Dividend 4.00% 4.21% 13.16% 15.00% 15.00%

Shares Information Matrix

No. of Shares Outstanding 140.900 140.900 125.244 109.623 97.878

Earnings Per Share 21.86 22.48 20.6 20.26 15.21

Number of Shareholders 66,032 69,429 66,608 53,673 50,302

Market Value Per Share 283 253 303 504 296

Price Earnings Ratio 12.95 11.26 13.07 19.35 15.14

Net Asset Value Per Share 199.21 179.61 172.45 186.11 163.58

Dividend Payout Ratio 18.30% 18.73% 63.87% 65.82% 76.73%

Other Information

Total Number of Branches (Including Extension

196 196 190 189 186
Counter)

Number of ATM 227 225 212 208 209

Number of Employees 1,982 1,969 1,893 1,862 1,887

ANNUAL 7
REPORT 2023-24
 FIVE YEAR’S PERFORMANCE

TOTAL ASSETS TOTAL SHAREHOLDERS EQUITY

NPR in Billion NPR in Billion

Loans ad Advances Paid up Capital

Investments
Reserve Funds and Surpluses
Other Assets
Total Shareholders Equity
Total Assets
297.34
285.95 28.07
264.33 25.31
25.42 36.33
229.07 18.59
18 21.60
20.40
69.66 57.48
17.90
17 59.65 13.98
170.59 16.01 11.22
45.52 9.07
17.88 9.44
25.21 6.22

186.09 190.87 203.54

165.65 12.52 14.09 14.09
127.50 9.79 10.96

2019-20 2020-21 2021-22 2022-23 2023-24

2019-20 2020-21 2021-22 2022-23 2023-24

NET PROFIT VS RETURN ON ASSETS/EQUITY CAPITAL SURPLUS OVER MINIMUM REQUIREMENT

NPR in Billion NPR in Billion

Capital Surplus/(Deficit) over

Net Profit Aer Tax Minimum Capital
Return on Equity Minimum Capital
Return on Assets Requirement
Total Capital

3.17 3.08 28.12 28.99 28.90

2.85 2.90
26.22
2.14 3.43 2.15
4.32
15.68% 20.24 4.63
13.81% 13.82% 13.50% 3.34
11.54%
25.56 26.75
23.80
21.59
16.90
1.33% 1.43% 1.18% 1.15% 1.06%

2019-20 2020-21 2021-22 2022-23 2023-24 2019-20 2020-21 2021-22 2022-23 2023-24

TOTAL INCOME VS TOTAL EXPENSES NET ASSET VALUE PER SHARE VS MARKET PRICE PER SHARE
NPR in Billion NPR

Total Income Market Value Per Share

Total Expenditure Net Asset Value Per Share

504
29.91 28.16

23.17
296 303
18.11 283
17.18 253
24.15 22.64
18.30 186.11 199.21
163.58 172.45 179.61
13.36 13.15

2019-20 2020-21 2021-22 2022-23 2023-24

2019-20 2020-21 2021-22 2022-23 2023-24

ANNUAL
8 REPORT 2023-24
CLASSIFIED LOANS & PROVISIONS CREDIT TO DEPOSIT RATIO VS INTEREST SPREAD
NPR in Billion NPR in Billion

Classified Loans
Credit to Deposit Rao
Provision for Classified Loans
Interest Spread
Percentage of NPLs to total Loans and Advances

2.17% 4.81%
2.01%
4.37%

4,417.87
3.99% 3.99%
3.70%
3,831.80

96.08%
1.37%

90.60%
89.04%
1.07%
1.00%
1,996.71

84.94%

84.63%
1,752.27

1,649.54

1,996.78

2,934.90
1,111.96
1,059.59

794.82

2019-20 2020-21 2021-22 2022-23 2023-24 2019-20 2020-21 2021-22 2022-23 2023-24

NUMBER OF BRANCHES AND ATMS PROFIT PER EMPLOYEE

NPR in Million

Total Number of Branches

(including extension counter)
Number of ATMs

1.61

1.55
1.53

1.53
225

225

1.14
212
209

208

196

196
190
189
186

2019-20 2020-21 2021-22 2022-23 2023-24

2019-20 2020-21 2021-22 2022-23 2023-24

ANNUAL 9
REPORT 2023-24
 FINANCIAL
HIGHLIGHTS
GROWTH

BALANCE SHEET SIZE LOAN AND ADVANCES (ACTUAL)

NPR/ USD in Billion NPR/ USD in Billion

2019-20 170.59 1.30 2019-20 127.50 0.97

2020-21 228.94 1.74 2020-21 165.65 1.26

2021-22 264.33 2.01 2021-22 186.09 1.42

2022-23 285.98 2.18 2022-23 190.87 1.45

2023-24 297.34 2.22 2023-24 203.54 1.52

LOANS & ADVANCES (NFRS) LOAN TO BFIs & CUSTOMERS

NPR/ USD in Billion NPR in Billion

Loan to BFIs
Loan to Customers

2019-20 127.58 0.95

195.47
183.98
178.59
158.58

2020-21 164.61 1.23

123.57

2021-22 184.99 1.38

2022-23 189.15 1.44

6.40
6.03

5.77
5.17
4.00

2023-24 201.24 1.50

2019-20 2020-21 2021-22 2022-23 2023-24

DEPOSITS CAPITAL ADEQUACY RATIO

NPR/ USD in Billion %

13.36%
13.17%
2019-20 145.95 1.11 13.00%

2020-21 185.20 1.41 12.47%

2021-22 196.48 1.49

11.88%

2022-23 228.57 1.74

2023-24 244.91 1.83

2019-20 2020-21 2021-22 2022-23 2023-24

ANNUAL
10 REPORT 2023-24
EFFICIENCY

NET INTEREST MARGIN PROFIT AFTER TAX

NPR/ USD in Billion NPR/ USD in Billion

2019-20 5.57 0.04 2019-20 2.14 0.02

2020-21 5.51 0.04 2020-21 2.85 0.02

2021-22 6.60 0.05 2021-22 2.90 0.02

2022-23 8.18 0.06 2022-23 3.17 0.02

2023-24 7.93 0.06 2023-24 3.08 0.02

RUPEE EARNED & RUPEE SPENT COST INCOME RATIO

%
NPR in Billion

Rupee earned
Rupee spent

47.4%
29.91 46.6%
28.16 46.3%

23.17
26.74
17.18 18.11 25.08
43.9%
20.26
42.8%
15.04 15.25

2019-20 2020-21 2021-22 2022-23 2023-24 2019-2020 2020-2021 2021-2022 2022-2023 2023-2024

RESILIENCE

NPA RATIO PROVISION COVERAGE RATIO (PCR)

% %

Gross NPA % Net NPA %

2.17% 192.47% 189.43%

2.01%

136.29%
135.79%
129.70%
1.38%

1.07%
1.00% 0.96%
0.73%
0.55% 0.52% 0.48%

2019-20 2020-21 2021-22 2022-23 2023-24 2019-20 2020-21 2021-22 2022-23 2023-24

ANNUAL 11
REPORT 2023-24
 RETURNS

RETURN ON EQUITY (ROE) RETURN ON ASSETS (ROA)

% %

1.43%
1.33%
15.68%
1.18% 1.15%
13.81% 13.82% 13.50% 1.06%
11.54%

2019-20 2020-21 2021-22 2022-23 2023-24 2019-20 2020-21 2021-22 2022-23 2023-24

TOTAL NETWORTH EARNINGS PER SHARE (EPS)

NPR
NPR in Billion

28.07
25.31

21.59 22.48 21.86

20.4
20.26 20.60
16.01
15.21

2019-20 2020-21 2021-22 2022-23 2023-24 2019-20 2020-21 2021-22 2022-23 2023-24

DIVIDEND DISTRIBUTION PRICE EARNINGS RATIO

%

15.00% 15.00%
19.35
13.16%

15.14
13.07 12.95
11.26

4.21% 4.00%

2019-20 2020-21 2021-22 2022-23 2023-24 2019-20 2020-21 2021-22 2022-23 2023-24

ANNUAL
12 REPORT 2023-24
DUPONT ANALYSIS
5 FACTORS MODEL
Under the DuPont Analysis the Bank has tried to decompose the different drivers of Return on Equity (ROE) to better understand
the factors contributing to movement in its ROE. Net profit margin, asset turnover and financial leverage (also known as equity
multiplier) has been used while, Net profit margin has been further divided into Operating profit margin, Interest expense rate
and Tax retention rate.

RETURN ON
EQUITY

NET PROFIT ASSET FINANCIAL

MARGIN TURNOVER LEVERAGE

OPERATING INTEREST TAX RETENTION

PROFIT MARGIN EXPENSE RATE RATE

FINANCIAL DATA COMPARATIVE

PARTICULARS FY 2023-24 FY 2022-23

Return on Equity (ROE) 11.54% 13.50%

Operating Profit Margin* 25.73% 24.97%

Average Asset Turnover Ratio 0.0882 0.1006

Interest Expense Rate** 0.73% 0.85%

Tax Retention Rate 68.82% 69.37%

Financial Leverage 10.93 11.73

The Bank’s ROE decreased from 13.50% in FY 2022-23 to 11.54% in FY 2023-24 primarily due to three key factors: decrease in
financial leverage by 0.8044 suggest the Bank’s reduced reliance on debt and potential for higher returns; a decline in average
asset turnover ratio by 0.0124, indicating less efficiency in utilizing assets to generate revenue; and a reduction in the tax
retention rate by 0.55%, which increased tax expenses subsequently lowering income attributable to shareholders.

Despite the negative factors there were two positive drivers: an increase in the operating profit margin by 0.76%, reflecting
improved profitability from core operations, and a decrease in the interest expense rate by 0.12%, leading to lower borrowing
costs.

However, the combined significant impact of the downward drivers led to the overall decline in ROE from 13.50% to 11.54% in FY
2023-24.

*Operating profit margin of the Bank has been calculated as Profits before income tax expenses and interest expenses on external borrowings (except
deposits) such as borrowings from NRB, interbank borrowings and external commercial borrowings.

** The Bank has considered interest expenses on external borrowings (except deposits) such as borrowings from NRB, interbank borrowings and external
commercial borrowings in calculation of interest expense rate.

ANNUAL 13
REPORT 2023-24
 HORIZONTAL ANALYSIS

STATEMENT OF FINANCIAL POSITION

Amount in NPR
PARTICULARS 2023-24 2024 VS. 2023 2022-23 2023 VS. 2022 2021-22

Assets

Cash and Cash Equivalent 22,739,728,891 97% 11,554,080,479 46% 7,928,989,024

Due from Nepal Rastra Bank 9,453,753,577 6% 8,879,504,444 55% 5,730,448,535

Placements with Bank and

6,562,120,179 31% 5,011,346,934 1465% 320,313,255
Financial Institutions

Derivative Financial
4,976,896 -71% 17,320,155 -12% 19,694,323
Instruments

Other Trading Assets 18,998,790 - 121,209,048 - -

Loan and Advances To B/Fis 5,767,824,492 12% 5,170,773,907 -19% 6,403,394,142

Loans and Advances To

195,473,382,509 6% 183,982,742,234 3% 178,587,363,232
Customers

Investment Securities 47,978,959,412 -23% 62,480,476,034 9% 57,368,161,732

Current Tax Assets 217,840,347 -17% 263,764,947 19% 221,065,203

Investment In Subsidiaries 51,000,000 0% 51,000,000 0% 51,000,000

Investment In Associates - - -

Investment Property 727,570,174 11% 654,537,489 207% 213,307,612

Property and Equipment 3,495,827,216 -1% 3,548,089,447 15% 3,077,068,355

Goodwill and Intangible Assets 146,146,602 -12% 166,000,283 132% 71,490,971

Deferred Tax Assets - - -

Other Assets 4,703,288,420 16% 4,050,241,118 -7% 4,334,727,127

Total Assets 297,341,417,505 4% 285,951,086,520 8% 264,327,023,510

Liabilities

Due to Bank and Financial

3,578,162,810 -69% 11,613,657,572 61% 7,234,641,506
Institutions

Due to Nepal Rastra Bank 391,922,787 36% 288,453,474 -99% 24,965,102,753

Derivative Financial
3,984,885 -83% 23,887,253 23% 19,359,606
Instruments

Deposits From Customers 241,329,082,024 8% 223,654,669,691 17% 191,550,643,583

Borrowing 5,964,375,769 -18% 7,312,480,160 1,022,800,000

Current Tax Liabilities - - -

Provisions - - -

Deferred Tax Liabilities 669,639,275 33% 501,929,292 110% 239,223,287

Other Liabilities 5,672,397,480 2% 5,586,859,110 -7% 6,034,819,684

Debt Securities Issued 11,662,559,000 0% 11,662,559,000 0% 11,662,559,000

Subordinated Liabilities - - -

ANNUAL
14 REPORT 2023-24
 PARTICULARS 2023-24 2024 VS. 2023 2022-23 2023 VS. 2022 2021-22

Total Liabilities 269,272,124,030 3% 260,644,495,553 7% 242,729,149,419

Equity

Share Capital 14,089,980,190 0% 14,089,980,190 12% 12,524,426,835

Share Premium - - -

Retained Earnings 580,361,617 -13% 663,610,438 -51% 1,359,868,480

Reserves 13,398,951,668 27% 10,553,000,339 37% 7,713,578,776

Total Equity 28,069,293,475 11% 25,306,590,967 17% 21,597,874,092

Total Liabilities and Equity 297,341,417,505 4% 285,951,086,520 8% 264,327,023,510

Horizontal analysis of a balance sheet shows comparison of the values of assets, liabilities, and equity across three years
periods to assess trends and changes in business growth. In this case, the analysis shows that while assets, liabilities, and
equity have grown compared to the previous year, the growth was even more significant in the last year than current year.

ANNUAL 15
REPORT 2023-24
 STATEMENT OF PROFIT OR LOSS
Amount in NPR
PARTICULARS 2023-24 2024 Vs. 2023 2022-23 2023 VS. 2022 2021-22

Interest Income 25,716,027,983 -7% 27,659,998,067 34% 20,677,563,975

Interest Expense 17,785,958,012 -9% 19,486,423,098 38% 14,080,716,460

Net Interest Income 7,930,069,971 -3% 8,173,574,969 24% 6,596,847,515

Fee and Commission Income 1,815,388,806 7% 1,693,079,336 12% 1,505,592,323

Fee and Commission Expense 389,054,337 12% 347,458,421 22% 285,888,969

Net Fee and Commission

1,426,334,469 6% 1,345,620,915 10% 1,219,703,354
Income

Net Interest, Fee and

9,356,404,440 -2% 9,519,195,884 22% 7,816,550,869
Commission Income

Net Trading Income 239,844,593 18% 202,703,890 -54% 442,926,681

Other Operating Income 381,052,402 13% 336,328,302 -37% 532,489,900

Total Operating Income 9,977,301,435 -1% 10,058,228,076 14% 8,791,967,450

Impairment Charge/(Reversal)
1,051,123,141 -11% 1,187,561,177 95% 607,471,211
for Loans and Other Losses

Net Operating Income 8,926,178,295 1% 8,870,666,900 8% 8,184,496,238

Personnel Expenses 2,977,901,219 4% 2,852,235,828 6% 2,685,015,444

Other Operating Expenses 985,628,185 7% 917,442,986 11% 827,855,831

Depreciation & Amortization 478,149,579 7% 448,006,336 11% 405,072,283

Operating Profit 4,484,499,312 -4% 4,652,981,749 9% 4,266,552,680

Non-Operating Income 11,264,646 -16% 13,471,787 56% 8,609,620

Non-Operating Expense 19,997,998 -80% 101,194,542 506% 16,694,239

Profit Before Income Tax 4,475,765,961 -2% 4,565,258,995 7% 4,258,468,061

Income Tax Expense (Current

1,428,499,479 1% 1,412,442,144 1% 1,396,816,319
Tax)

Income Tax Expense (Deferred

(32,762,202) 135% (13,954,496) -66% (40,812,300)
Tax)

Profit For The Period 3,080,028,684 -3% 3,166,771,347 9% 2,902,464,042

The Horizontal analysis of the Bank’s profit and loss statement, over the three year shows that operating profit has declined,
which has negatively impacted the Bank’s overall profitability, leading to a reduction in net profit. This decline contrasts with the
previous year when operating profit had increased. The decrease in operating profit is the primary factor driving the reduced
net profit in the current period.

ANNUAL
16 REPORT 2023-24
VERTICAL ANALYSIS
STATEMENT OF FINANCIAL POSITION
Amount in NPR

PARTICULARS 2023-24 % 2022-23 % 2021-22 %

Assets

Cash and Cash Equivalent 22,739,728,891 8% 11,554,080,479 4% 7,928,989,024 3%

Due From Nepal Rastra Bank 9,453,753,577 3% 8,879,504,444 3% 5,730,448,535 2%

Placements With Bank and
6,562,120,179 2% 5,011,346,934 2% 320,313,255 0%
Financial Institutions
Derivative Financial
4,976,896 0% 17,320,155 0% 19,694,323 0%
Instruments
Other Trading Assets 18,998,790 0% 121,209,048 0% - 0%

Loan and Advances To B/Fis 5,767,824,492 2% 5,170,773,907 2% 6,403,394,142 2%

Loans and Advances To
195,473,382,509 66% 183,982,742,234 64% 178,587,363,232 68%
Customers
Investment Securities 47,978,959,412 16% 62,480,476,034 22% 57,368,161,732 22%

Current Tax Assets 217,840,347 0% 263,764,947 0% 221,065,203 0%

Investment In Subsidiaries 51,000,000 0% 51,000,000 0% 51,000,000 0%

Investment In Associates - 0% - 0% - 0%

Investment Property 727,570,174 0% 654,537,489 0% 213,307,612 0%

Property and Equipment 3,495,827,216 1% 3,548,089,447 1% 3,077,068,355 1%

Goodwill and Intangible

146,146,602 0% 166,000,283 0% 71,490,971 0%
Assets

Deferred Tax Assets - 0% - 0% - 0%

Other Assets 4,703,288,420 2% 4,050,241,118 1% 4,334,727,127 2%

Total Assets 297,341,417,505 100% 285,951,086,519 100% 264,327,023,511 100%

Liabilities
Due To Bank and Financial
3,578,162,810 1% 11,613,657,572 4% 7,234,641,506 3%
Institutions
Due To Nepal Rastra Bank 391,922,787 0% 288,453,474 0% 24,965,102,753 9%
Derivative Financial
3,984,885 0% 23,887,253 0% 19,359,606 0%
Instruments
Deposits From Customers 241,329,082,024 81% 223,654,669,691 78% 191,550,643,583 72%

Borrowing 5,964,375,769 2% 7,312,480,160 3% 1,022,800,000 0%

Current Tax Liabilities - 0% - 0% - 0%

Provisions - 0% - 0% - 0%

Deferred Tax Liabilities 669,639,275 0% 501,929,292 0% 239,223,287 0%

Other Liabilities 5,672,397,480 2% 5,586,859,110 2% 6,034,819,684 2%

Debt Securities Issued 11,662,559,000 4% 11,662,559,000 4% 11,662,559,000 4%
Subordinated Liabilities - 0% - 0% - 0%
Total Liabilities 269,272,124,030 91% 260,644,495,552 91% 242,729,149,419 92%
Equity
Share Capital 14,089,980,190 5% 14,089,980,190 5% 12,524,426,835 5%
Share Premium - 0% - 0% - 0%
Retained Earnings 580,361,617 0% 663,610,438 0% 1,359,868,480 1%
Reserves 13,398,951,668 5% 10,553,000,339 4% 7,713,578,776 3%
Total Equity 28,069,293,475 9% 25,306,590,967 9% 21,597,874,092 8%
Total Liabilities and Equity 297,341,417,505 100% 285,951,086,519 100% 264,327,023,511 100%

Under Vertical analysis of its balance sheet, the Bank has expressed each component of assets, liabilities and equity as a
percentage of total assets. This approach helps assess the relative weight of different balance sheet components allowing
clearer understanding of contribution of each to total financial position. This shows the deposits from customer make up a
significant portion of the balance sheet, followed by loans and advances to customers.
ANNUAL 17
REPORT 2023-24
 STATEMENT OF PROFIT OR LOSS
Amount in NPR
PARTICULARS 2023-24 % 2022-23 % 2021-22 %

Interest Income 25,716,027,983 100% 27,659,998,067 100% 20,677,563,975 100%

Interest Expense 17,785,958,012 69% 19,486,423,098 70% 14,080,716,460 68%

Net Interest Income 7,930,069,971 31% 8,173,574,969 30% 6,596,847,515 32%

Fee and Commission Income 1,815,388,806 7% 1,693,079,336 6% 1,505,592,323 7%

Fee and Commission Expense 389,054,337 2% 347,458,421 1% 285,888,969 1%

Net Fee and Commission Income 1,426,334,469 6% 1,345,620,915 5% 1,219,703,354 6%

Net Interest, Fee and Commission

9,356,404,440 36% 9,519,195,884 34% 7,816,550,869 38%
Income

Net Trading Income 239,844,593 1% 202,703,890 1% 442,926,681 2%

Other Operating Income 381,052,402 1% 336,328,302 1% 532,489,900 3%

Total Operating Income 9,977,301,435 39% 10,058,228,076 36% 8,791,967,450 43%

Impairment Charge/(Reversal) For Loans

1,051,123,141 4% 1,187,561,177 4% 607,471,211 3%
and Other Losses

Net Operating Income 8,926,178,295 35% 8,870,666,900 32% 8,184,496,238 40%

Personnel Expenses 2,977,901,219 12% 2,852,235,828 10% 2,685,015,444 13%

Other Operating Expenses 985,628,185 4% 917,442,986 3% 827,855,831 4%

Depreciation & Amortisation 478,149,579 2% 448,006,336 2% 405,072,283 2%

Operating Profit 4,484,499,312 17% 4,652,981,749 17% 4,266,552,680 21%

Non-Operating Income 11,264,646 0% 13,471,787 0% 8,609,620 0%

Non-Operating Expense 19,997,998 0% 101,194,542 0% 16,694,239 0%

Profit Before Income Tax 4,475,765,961 17% 4,565,258,995 17% 4,258,468,061 21%

Income Tax Expense (Current Tax) 1,428,499,479 6% 1,412,442,144 5% 1,396,816,319 7%

Income Tax Expense (Deferred Tax) (32,762,202) 0% (13,954,496) 0% (40,812,300) 0%

Profit For The Period 3,080,028,684 12% 3,166,771,347 11% 2,902,464,042 14%

Under the Vertical analysis of profit and loss statement, the Bank has expressed each item as a percentage of a base item,
typically interest income. In this case, each component of the income statement is calculated as a percentage of interest
income, allowing for a clearer view of how different expenses and revenues of the Bank relate to the main source of income.

ANNUAL
18 REPORT 2023-24
 NON FINANCIAL
HIGHLIGHTS

Mid July 2024

196
Branches 227 2,851 807,032 50,176 41,759
(Including Extension ATMs POS Debit Card Credit Card QR
Counters) Users Users Merchants

NON-FINANCIAL
HIGHLIGHTS

1,006,766 73 1,682,340 1,982 24 39.87

Mobile Banking Branchless Deposit CSR spends Market
Employees
Users Banking (BLBs) Accounts (NPR in Million) Capitalization
(NPR in Billion)

ANNUAL 19
REPORT 2023-24
 MILESTONES

ANNUAL
20 REPORT 2023-24
 AWARDS
AND ACCOLADES

EXCELLENCE IN DRIVING INNOVATION BEST PRESENTED ANNUAL REPORT

VISA 2017 ICAN 2021

BEST OPERATION BANK (SOUTH ASIA) EXCELLENCE IN PREPAID CARDS BUSINESS AWARD FOR CORPORATE EXCELLENCE
IFC 2021 VISA 2022 HRM 2022

ANNUAL
22 REPORT 2023-24
 CERTIFICATE OF MERIT BEST PRESENTED ANNUAL REPORT CERTIFICATE OF MERIT
(PRIVATE SECTOR BANKS) ICAN 2022 SAFA 2023
SAFA 2022

BEST PRESENTED ANNUAL REPORT (BRONZE) EXCELLENCE IN PREPAID CARDS EXCELLENCE IN CONSUMER CREDIT CARDS BUSINESS
ICAN 2023 VISA 2023 VISA 2024

ANNUAL 23
REPORT 2023-24
 ANNUAL
24 REPORT 2023-24
CORPORATE
STRUCTURE

CONVENTIONAL
BANKING

TRADE REMITTANCE
FINANCING BUSINESS

MAIN
OPERATIONS

BLB AGENT
BANKING

SUBSIDIARY BRANCHLESS
COMPANY BANKING

ALTERNATE
SIDDHARTHA
DELIVERY
CAPITAL LTD.
CHANNELS

ANNUAL 25
REPORT 2023-24
 ORGANIZATION BOARD OF
STRUCTURE DIRECTORS

EMPLOYEE
AUDIT
SERVICE & FACILITY
COMMITTEE
COMMITTEE

CHIEF
HEAD INTERNAL COMPANY
AUDIT SECRETARY EXECUTIVE
OFFICER

CHIEF CENTRAL CREDIT CHIEF CHIEF INFORMATION,

CHIEF BUSINESS SENIOR BUSINESS UNDERWRITTING
ADMINISTRATION & COMMUNICATION &
OFFICER OFFICER OFFICER
CONTROL OFFICER TECHNOLOGY OFFICER

CHIEF CHIEF CHIEF HEAD LIABILITY HEAD INT’L BUSINESS

MSME BANKING CORPORATE BANKING RETAIL BANKING (INSTITUTIONAL & TRANSACTION
OFFICER OFFICER OFFICER & HNI) BANKING

HEAD TREASURY
HEAD HUMAN HEAD SPECIAL
& INVESTMENT HEAD MARKETING
RESOURCE ASSETS CELL
BANKING

ANNUAL
26 REPORT 2023-24
 RISK
AML/CFT
MANAGEMENT
COMMITTEE
COMMITTEE

CHIEF
HEAD
INTEGRATED RISK
AML/CFT
OFFICER

CUSTOMER
HEAD STRATEGY CHIEF OPERATING
HEAD LEGAL EXPERIENCE
& FINANCE OFFICER
OFFICER

CENTRALIZED CENTRAL ACCOUNTS CENTRAL BRANCH DIGITAL PAYMENTS PROJECT

FUNCTION DEPARTMENT ADMIN COORDINATOR OPERATION MANAGEMENT

ANNUAL 27
REPORT 2023-24
 BOARD OF
DIRECTORS
ANNUAL
28 REPORT 2023-24
STANDING LEFT TO RIGHT
MR. RAHUL AGRAWAL MR. DINESH SHANKER PALIKHE MRS. MINA KUMARI SAINJU MR. ANKIT KEDIA
DIRECTOR DIRECTOR INDEPENDENT DIRECTOR DIRECTOR

SITTING LEFT TO RIGHT

MR. MANOJ KUMAR KEDIA MR. NARENDRA KUMAR AGRAWAL
CHAIRMAN DIRECTOR

ANNUAL 29
REPORT 2023-24
 DIRECTOR’S PROFILE AND THEIR REPRESENTATION IN
BOARD OF OTHER ORGANIZATIONS

MR. MANOJ KUMAR KEDIA MR. NARENDRA KUMAR AGRAWAL MR. RAHUL AGRAWAL
CHAIRMAN DIRECTOR DIRECTOR

Mr. Manoj Kumar Kedia has been Mr. Narendra Kumar Agrawal is a Mr. Rahul Agrawal has been
the Chairman of the Board of member of the Board of Directors, a member of the Board of
Directors of the Bank since January representing the promoter Directors since January 29, 2021,
5, 2016, representing the promoter shareholders of the Bank. He has representing the promoter
shareholder, M/S Prudential been associated with the Bank shareholders of the Bank. He is the
Investment Company Pvt. Ltd. He is since its inception as a founding Convener of the Employee Service
a founding promoter and has been promoter and Board Member. Facility Committee of the Bank.
a Board Member since the Bank’s Additionally, Mr. Agrawal serves
inception. as the Convener of the Risk He holds an MBA degree from
Management Committee and is a Middlesex University, London and
Mr. Kedia is a well-known personality member of the Audit Committee has 21 years of experience in
in Nepal, recognized as a successful of the Bank. Nepal’s industrial and business
and distinguished business leader. sectors. Mr. Agrawal is an Executive
With over 25 years of experience With 43 years of experience in Director of Reliance Group of
in the industrial, commercial, and Nepal’s industrial and business Nepal. He also serves as a Director
business sectors, he has made sectors, Mr. Agrawal has played of Reliance Supertech Cement
significant contributions to the a key role in various enterprises. Pvt. Ltd., Reliance Cement Pvt.
economic and social development He is the Director of Arunodaya Ltd., Annapurna Quarries Pvt. Ltd.,
of the nation. Udhyog Pvt. Ltd., Ganesh Ferrozinc and Reliance Paper Mills Pvt. Ltd.
Udhyog Pvt. Ltd., Ganapati Metacon Additionally, he is the Proprietor of
He serves as the Managing Director Pvt. Ltd., Yeti Polychem Pvt. Ltd., Reliance Trade Center.
of Kedia Organization, Brij Cement Reliance Supertech Cement Pvt.
Pvt. Ltd., and Sundar Products Ltd., and Dedraj Sewali Devi Todi He has been actively involved in
and Services Pvt. Ltd. Additionally, D.A.V. School Pvt. Ltd. Additionally, various industrial and commercial
he is the Chairman of Kedia he is the Proprietor of Garud Impex. sectors across the country.
Investment Corporation Pvt. Ltd., Beyond his business engagements, Moreover, he has experience
Kedia International Pvt. Ltd., Magna Mr. Agrawal has been actively working in several banks in Nepal
Securities Company Pvt. Ltd., Gurans involved in Rotary International, and India.
Cement Pvt. Ltd., and Sunrise Nepal the Rotary Club of Biratnagar, and
Food & Beverage Pvt. Ltd. other prestigious organizations.

Furthermore, he holds the position of

Executive Director at Arghakhanchi
Cement Pvt. Ltd. and Siddhartha
Minerals and is a Director at Shree
Steels Pvt. Ltd. His contributions have
played a significant role in advancing
Nepal’s trade and commerce sector.

ANNUAL
30 REPORT 2023-24
 MR. DINESH SHANKER PALIKHE MR. ANKIT KEDIA MRS. MINA KUMARI SAINJU
DIRECTOR DIRECTOR INDEPENDENT DIRECTOR

Mr. Dinesh Shanker Palikhe has Mr. Ankit Kedia has been a member Mrs. Mina Kumari Sainju has been
been a member of the Board of the Board of Directors since an Independent Director of the
of Directors since July 7, 2016, January 29, 2021, representing the Bank since April 27, 2021. She is
representing public shareholders public shareholder of the Bank, the convener of the AML/CFT
of the Bank, M/S Ginni Investment M/S. Leverage Holdings Pvt. Ltd. He Committee of the Bank. She holds
Pvt. Ltd. Mr. Palikhe is also the is also a member of the Employee an MBA degree from Tribhuvan
convener of the Audit Committee Service Facility Committee and the University and has 30 years of
and a member of the Risk AML/CFT Committee of the Bank. work experience at various levels,
Management Committee of the including Deputy General Manager
Bank. He holds an MBA degree from of Nepal Bank Limited.
James Cook University, Singapore,
He holds an MBA degree from and has been involved in the She has also served as a Director
Tribhuvan University and has agricultural products, industrial, at erstwhile Janata Bank Nepal
worked as a Director in several and business sectors of Nepal Limited, erstwhile Paschimanchal
banks and financial institutions for 12 years. He is the Managing Gramin Bikas Bank Limited, and
of Nepal for 13 years. He has been Director of Mahabir Overseas Pvt. erstwhile Nagarik Laghubitta Bittiya
involved in the field of business Ltd., Leverage Holdings Pvt. Ltd., and Sanstha Limited.
and investment for the past 27 Mahabir International Suppliers
years, including hydropower, Pvt. Ltd. Additionally, he represents
merchant banking, and investment Nepal as a Director in the Global
management companies. Pulse Confederation.
Additionally, he is actively engaged
with the Nepal Cancer Relief
Society, Rotary Club of Pokhara
Annapurna, Lions Club of Pokhara
Himalayan, and other prestigious
organizations.

ANNUAL 31
REPORT 2023-24
 EXECUTIVE
COMMITTEE
ANNUAL
32 REPORT 2023-24
STANDING LEFT TO RIGHT SITTING LEFT TO RIGHT
MR. MANOHAR KC MR. SHER BAHADUR BUDHATHOKI
MR. PRADEEP PANT MR. SUNDAR PRASAD KADEL
MR. ARJUN BHADRA KHANAL MR. RAMESHWAR PRASAD BASHYAL
MR. PRASHANNA KHADKA
MR. SRIJAN KRISHNA MALLA
MRS. SHAILAJA GYAWALI
MR. SURESH RAJ MAHARJAN

ANNUAL 33
REPORT 2023-24
 CAPITAL AND ITS RISK
MANAGEMENT PRACTICES
VALUE CREATION MODEL/BUSINESS MODEL
The Bank’s business model is its system of creating values over the short, medium and long term for its various forms of capital
such as financial capital, human capital, social & relationship capital and others by transforming inputs through its business
activities. The Bank’s value creation model is depicted above in section above.

INPUTS CORE BUSINESS SUPPORTING VALUE

ACTIVITIES ACTIVITIES CREATED

FINANCIAL CAPITAL  Provide savings products  Human resource and FINANCIAL CAPITAL
 Equity training  Return on equity of 11.54%
 Provide credit to support  Operating profit of NPR
 Reserves
consumption and  Marketing 4.48 billion
 Deposits & borrowings economic activities  Net profit of NPR 3.08
 Research and
 Capital adequacy billion
 Strategic investments Development
 Capital Adequacy ratio
to enhance business  Risk management and of 11.88%
HUMAN CAPITAL
 Experienced and capabilities for long term Internal audit
competent human value creation HUMAN CAPITAL
 Administration and
resources  Facilitate payments and  No. of employees: 1,982
engineering
 Technical and transactions  62% of male employees
 IT system development
managerial skills and 38% of female
 Finance, legal and employees
 Diversity and equality
recoveries  311 trainings during the
 Learning and year benefitting 6,473
Development participants
 Amount of employee
MANUFACTURED CAPITAL related expenditure: NPR
 Intellectual Capital 2.97 billion
 Branches
 Branchless Banking MANUFACTURED CAPITAL
 91 branches and 5
 Remittance Agents
extension counters
 ATMs  2,851 PoS machines
 Digital Payment solutions  807,032 debit cards and
50,176 credit cards
INTELLECTUAL CAPITAL  Better service delivery
 Brand  1,006,766 mobile banking
 Propriety Technologies users

 Advanced Software
INTELLECTUAL CAPITAL
 Automated Workflows  Mobile Banking Users
174,544
SOCIAL AND RELATIONSHIP  Robotic Process
CAPITAL Automation
 Relationship with  Easy Banking
stakeholders
 CSR activities SOCIAL AND RELATIONSHIP
CAPITAL
 Quality service to  4% dividend
customers
 Rs 24 million spent on
 Partnership with CSR activities
government  NPR 3.35 billion
 Trade partners and contributed to
merchants Government through
taxes

ANNUAL
34 REPORT 2023-24
FINANCIAL CAPITAL OUTCOMES
Our financial capital represents the pool of funds comprising  Deposit growth: 7.15% (YoY comparison with FY 2022-23)
monetary resources sourced from our valued depositors,
 Loan portfolio growth: 6.63% (YoY comparison with FY 2022-
shareholders and other stakeholders. These resources, in
23)
the form of deposits, equity, and external borrowings, form
the foundation for our lending, investment, and operational  Total asset growth: 3.98% (YoY comparison with FY 2022-23)
activities. Our disciplined approach to raising, deploying, and
 Capital above minimum requirement: NPR 2,151.03 million
managing financial capital has enabled us to maintain a
fundamentally strong capital base, sustain business growth,
and deliver consistent returns to our shareholder.
HUMAN CAPITAL
COMPONENTS OF FINANCIAL CAPITAL Our human capital represents the workforce, talent, and
 Deposits from Customers capabilities that drive the Bank’s operational success and
innovation. It comprises of employees’ skills, knowledge,
 Shareholder’s Equity experience, and commitment, which are leveraged
 Retained earnings to execute our business strategy, enhance customer
satisfaction, and foster long-term organizational growth.
 External borrowing We invest in recruiting, developing, and retaining top talent
to maintain a competitive advantage in the ever-evolving
KEY METRICS financial sector.
 Return on Equity: 11.54%

 Return on Assets: 1.06% COMPONENTS OF HUMAN CAPITAL

 Skilled Workforce
 Capital Adequacy Ratio: 11.88%
 Leadership, Training and Development
 Net Profit: NPR 3,080.03 million
 Employee Engagement
The Bank strategically utilizes financial capital to support  Diversity & Inclusion
business growth while maintaining a strong balance sheet.
Our lending and investment decisions are based on rigorous KEY METRICS
risk assessment, profitability analysis, and alignment with  Total Number of Employees: 1982
strategic objectives.
 Gender Diversity Ratio: Male - 61.81% Female - 38.19%
INITIATIVES
 Strategic investment of shareholders’ fund The Bank focuses on optimizing internal workflows by
exploiting technology and upgrading infrastructure across
 Enhancing deposit solicitation strategies to increase
the Bank aiming to boost employee performance, streamline
customer engagement
operations, and support the Bank’s growth and customer
 Expanding External Commercial Borrowing service goals.

 Maintaining strong capital base and buffers to support

INITIATIVES
future business growth
 Talent Acquisition with competitive compensation and
 Regular monitoring of optimal liquidity level for right placement
operational stability  Offer growth opportunities to ensure employee
 Re-pricing loans to align with market conditions satisfaction and retention
 Investing in learning and leadership employee
 Adoption of enhanced risk management practices
development programs

CHALLENGES  Comprehensive employee wellness programs to promote

 Unpredictable economic conditions and volatile market mental and physical health
 Economic downturns in major sectors  Ensuring safe, healthy and equitable environment for all
 Balancing loan growth while maintaining asset quality employee
 Managing the gap between short-term liabilities and  Implementing a structured performance evaluation
long-term assets system driving accountability and growth
 Maintaining the spread to maintain profitability over the
 Human Capital Management System successfully
years
implemented
 Regulatory changes and compliance requirements

ANNUAL 35
REPORT 2023-24
 CHALLENGES
 Difficulty retaining skilled employees in a competitive job
market

 Maintaining high levels of employee engagement and

motivation

 Ensuring employees continuously upgrade their skills to

adapt to new technologies and innovations

OUTCOMES
 Staff acquisition during the year: 162

 Number of Staffs promoted during the year: 146

 Number of Trainings conducted : 311 to 6,473 participants

 Composition of employee below 40: 1,810

 Amount of employee related expenditure: NPR 2.97 billion

MANUFACTURED CAPITAL
Our Manufactured capital refers to the physical
infrastructure and assets owned or used by the Bank to
deliver its services, including branches, offices, technology
systems, equipment, and other tangible resources. These
assets are integral to the Bank’s daily operations, customer
service delivery, and overall efficiency. Our investment in
manufactured capital not only allows us to improve service
delivery but also positions the Bank to remain competitive
in an increasingly digitalized and fast-paced financial
landscape

COMPONENTS OF MANUFACTURED CAPITAL

 Branches

 Remittance and BLB Agents

 Digital Channels

 Systems and software

KEY METRICS
 Number of Branches (Including Extension Counter): 196

 Number of ATMs: 227

 BLB Agent Outlets: 73

 Number of Digital Channels: 14

 Number of Card holders and mobile banking users:

1,889,202

The Bank focuses on continuously upgrading its technology  Implementing eco-friendly and energy-efficient practices
infrastructure, optimizing its branch and office network, across the Bank
enhancing digital platforms, and implementing sustainable  Spreading the geographical boundaries through opening
practices to improve operational efficiency, customer more BLB channels and ATMs
experience, and long-term growth.

CHALLENGES
INITIATIVES  Keeping Up with Technological Advancements
 Continually upgrading the technology infrastructure
including core banking systems, digital platforms, and  Balancing the need for modern infrastructure with budget
cybersecurity measures constraints

 Enhancing the Bank’s digital tools and platforms, mobile  Efficiently managing physical spaces to meet the
banking apps and digital payment solutions demands of both employees and customers facilities

ANNUAL
36 REPORT 2023-24
OUTCOMES fostering innovation, and enhancing its value proposition
 Digitized Processes: 43 to customers. These assets enable us to meet evolving
customer needs, stay ahead of industry trends, and thrive in
 Digital Transactions: 58,278,742
a highly competitive environment.
 New Digital Banking Users: 324,503

 Customer Onboarding via Video Banking: 1,592 COMPONENTS OF INTELLECTUAL CAPITAL

 Brand Reputation

INTELLECTUAL CAPITAL  Proprietary process and workflows

Our intellectual capital refers to the intangible assets
 Proprietary Technologies
that drives the Bank’s competitive advantage, such as its
intellectual property, brand reputation, and organizational  Advanced software and robust security system
knowledge. Unlike physical assets, intellectual capital plays
a pivotal role in shaping the Bank’s long-term strategy,

ANNUAL 37
REPORT 2023-24
 KEY METRICS Key Components of Social and Relationship Capital
 Number of mobile banking users: 1,006,766  Customer Relationship
 Number of social media followers: 438,533  Strategic Partnership and Collaboration
 Website page view: 4,810,408  CSR Initiatives

The Bank focuses on fostering innovation, protecting

KEY METRICS
intellectual property, enhancing its brand value, and
 CSR Investment: NPR 24 Million
cultivating a culture of knowledge sharing.
 Number of partnership with international agencies: 8
INITIATIVES
 Use of high-quality, up-to-date software, advanced The Bank focuses on collaboration with communities to
firewall, and increased automation improve livelihoods, promote social development, and
create opportunities for a better quality of life. By actively
 Regular training programs to employees to enhance their
engaging with and supporting these communities, we not
skills and knowledge
only contribute to social well-being but also strengthen our
 Unique products and services offered to customers tieups with stakeholders, ensuring mutual benefits for both
managing customer expectation the Bank and society.

 Idea Bank for sharing insights and expertise of employees

INITIATIVES
 Customer Relationship Management through
CHALLENGES
personalized services, proactive communication, and
 Adopting to rapid technological changes
continuous engagement
 Identification and Management of Cybersecurity risks and
 Strategic Partnerships and Collaborations with businesses,
information security threats
technology providers, international agencies
 Ensuring Quality Investment in Technology Infrastructure
 Corporate Social Responsibility (CSR) Programs
 Maintaining Innovation in a Competitive Market in education, healthcare, poverty alleviation, and
environmental sustainability
 Maintaining a strong and trusted market reputation while
managing customer expectations  Customer Loyalty reward program

 Building an active and positive presence on social media

OUTCOMES platforms
 Video banking solution Implemented
 To combat banking fraud, the Bank collaborated with
 Implementation of Robotic Process Automation for Nepal Police to produce short films worth NPR 1 million,
enrollment, issuance, renew, re-pin, replacement of Debit shared via social media and the Police Partnership
and Credit Card, POS Merchant Settlement, etc. Program.

 Increase in user of mobile banking: 174,544

CHALLENGES
 Data center establishment at Head office  Evolving customer needs in a digital-first world

 Online Reputation and Social Media Presence influenced

SOCIAL AND RELATIONSHIP CAPITAL heavily by social media feedback and online reviews.
Our Social and Relationship Capital includes the long-term
 Aligning social initiatives with the Bank’s business goals
relationships and network created with key stakeholders
while staying true to its values
such as business partners, regulators, customers, and
shareholders. It reflects the trust, collaboration, and networks  Balancing shareholders expectations and transparent
that the Bank has built over time for its long-term success. communication

In addition, the Bank is committed to improving the wellbeing

OUTCOMES
of underprivileged segments of society through continued
investments in Corporate Social Responsibility (CSR)  CSR Initiatives include Education and Financial literacy
activities. (48%), Healthcare (33%), Environmental Conservation (12%),
Culture and Tourism (3%), Infrastructure and Security (2%),
Afforestation (1%) and Gender Equality (1%)

 NPR 3.35 billion contributed to Government through taxes

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38 REPORT 2023-24
RISK MANAGEMENT PRACTICES HUMAN CAPITAL RISK MANAGEMENT
Human capital risks, including talent retention, operational
inefficiencies, and compliance issues, are mitigated through
FINANCIAL CAPITAL RISK MANAGEMENT
competitive compensation, structured training programs,
The Bank’s financial capital risk management largely focuses
and leadership development initiatives. The Bank enhances
on mitigating credit, liquidity, market, operational, AML/CFT
employee engagement through wellness programs,
and security risks. The Bank ensures resilience through stress
digital HR solutions, and regular performance evaluations.
testing, automation of manual process, regular monitoring,
Initiatives include the implementation of a Human Capital
maintaining strong capital buffers, and strategic asset-
Management System (HCMS), leadership succession
liability management. To address cybersecurity threats, the
planning, comprehensive learning and development
Bank has implemented multi-layered IT security frameworks,
programs, and diversity and inclusion efforts to foster an
and fraud detection mechanism. Key initiatives include risk-
equitable workplace.
based pricing models, enhanced investment diversification,
automation of manual processes, and proactive credit
monitoring using early warning systems. The Bank also MANUFACTURED CAPITAL RISK MANAGEMENT
strengthens capital adequacy planning to meet regulatory To manage risks related to cybersecurity, technological
requirements and ensure financial stability. obsolescence, and infrastructure, the Bank invests in IT
security enhancements, business continuity planning,
and expansion of digital banking services.
Measures include strengthening digital
transaction platforms, conducting regular IT
security audits, approval for implementing
advanced fraud detection mechanisms,
and maintaining eco-friendly operational
practices. The Bank also ensures operational
efficiency by optimizing its branch network
and adopting energy-efficient technologies
to support long-term sustainability.

INTELLECTUAL CAPITAL RISK MANAGEMENT

The Bank safeguards intellectual capital
by addressing reputation, innovation, and
cybersecurity risks. Risk mitigation strategies
include proactive grievance handling, digital
literacy training, and enhanced intellectual
property protection. The Bank also invests
in fraud detection, customer data privacy,
web application firewall and cybersecurity
awareness to protect its digital assets.
Initiatives focus on continuous innovation in
digital banking solutions, advanced anti-
virus systems, and regular training to equip
employees with the latest technological
advancements.

SOCIAL AND RELATIONSHIP

CAPITAL RISK MANAGEMENT
Regulatory, compliance, and social risks
are managed through strong AML/CFT
frameworks, ESG policies, CSR policies and
customer engagement strategies. The
Bank mitigates these risks by fostering
partnerships with global institutions,
promoting financial literacy, and ensuring
compliance with sustainability regulations.
Initiatives include expanding financial
inclusion through digital channels,
strengthening stakeholder relationships,
and aligning CSR activities with the UN
Sustainable Development Goals (SDGs) to
contribute to economic and social well-
being.

ANNUAL 39
REPORT 2023-24
 KEY BUSINESS AREAS/
PRODUCTS AND SERVICES
Siddhartha Bank offers a comprehensive suite of products
and services designed to meet the diverse financial needs
of the customers. The Bank continuously enhances its
offerings to align with the evolving needs of its individual and
institutional customers. With a commitment to excellence, it
provides customized solutions and superior service to meet
specific financial requirements of its customers.

The Bank’s extensive product and service portfolio includes a

wide range of primary and ancillary banking facilities tailored
to different customer segments. Its core deposit products
comprise savings deposits, fixed deposits, current deposits,
and call deposits. In the savings deposit category, the
Bank offers various savings accounts specifically designed
to cater to different customer groups, including children,
students, women, seniors, and individuals working abroad,
with added benefits to enhance their banking experience.
These savings products are structured to promote a culture
of saving among customers.

In addition to the deposit products, the Bank provides

both fund-based and non-fund-based credit facilities, to
meet the financial needs of its customers. Retail banking
customers have access to a diverse range of loan products,
including auto loans, term loans, home loans, personal loans,
education loans, share loans, and loans secured against
Government Securities or fixed deposits. The Bank’s broad
loan portfolio is designed to accommodate the varying
financial needs of its MSME, Corporate customers as well.

Siddhartha Bank’s digital banking services enable customers

to conveniently manage their finances without the need for
in-branch visits, ensuring a seamless and efficient banking
experience.

RETAIL BANKING
Siddhartha Bank’s Retail Banking division is committed
to addressing the varied financial needs of individual
customers. Recognizing that every customer has unique
requirements, the Bank offers products and services
specifically designed to meet these needs. Through its retail
banking offerings, the Bank enables individuals to manage
their finances effectively, access credit facilities, and securely
deposit their funds.

MICRO, SMALL AND MEDIUM ENTERPRISES BANKING

Siddhartha Bank recognizes the vital role that Micro, Small,
and Medium Enterprises (MSMEs) play in the economic
growth of the country and offers specialized products and
services to meet their distinct financial needs. By utilizing
modern and sustainable banking approaches, the Bank
aims to support MSMEs that require modest investments but
face challenges in securing financing through conventional
channels.

With widespread branch network, the Bank serves MSMEs

nationwide, continuously refining its operations and service

ANNUAL
40 REPORT 2023-24
delivery to establish itself as their preferred financial partner.
To achieve this, the Bank has restructured its business model
and enhanced its service framework for greater accessibility
and efficiency.

Recognizing the dynamic nature of MSME operations, the

Bank prioritizes prompt responses, seamless banking access,
and expert financial support. Committed to expanding
its reach to rural customers, it delivers customized and
personalized financial solutions directly to their doorsteps.

CORPORATE BANKING
Siddhartha Bank’s Corporate Banking division caters to
a diverse clientele, including multinational corporations,
public institutions, and business banking groups. The Bank
has consistently expanded and strengthened its corporate
banking portfolio, achieving sustained growth each year.

Serving a broad spectrum of industries such as agriculture,

aviation, cement, media and communications, education,
hospitality, hydropower, import/export, iron and steel, local
trading, medical institutions, pharmaceuticals, printing,
packaging, and real estate, the Bank provides customized
deposit, credit, and trade finance solutions designed to meet
the unique financial requirements of its corporate clients.

RURAL BANKING
The Bank has successfully established 17 branches in rural
municipalities across the country as part of its initiative to
promote financial literacy and inclusion. These branches
have supported the Bank’s “vertical and horizontal
downscaling” strategy, particularly aimed at individuals who
face difficulties accessing banking services. In line with the
Federal Government System implemented in Nepal, Nepal
Rastra Bank (NRB) required all commercial banks to expand
their branch networks, ensuring at least one branch in each
of the 753 local government levels. Siddhartha Bank met the
NRB’s deadline by becoming the first commercial bank in the
country to establish all 17 rural branches assigned to it.

BRANCHLESS BANKING
Operating under the name “Sajilo Banking Sewa,” the Bank
launched Branchless Banking (BLB) in Nepal in 2011 to provide
financial and non-financial services directly to marginalized
communities, especially in regions with low literacy rates. The
BLB service operates through a card-based and biometric
authentication system, enabling Business Correspondents
(agents) to conduct transactions on behalf of the Bank.

This initiative offers a convenient banking alternative for the

rural population, allowing access to essential services such
as deposits, withdrawals, money transfers, bill payments,
balance inquiries and loan applications.

Moreover, the Bank leverages BLB outlets for a variety of

purposes, including facilitating banking services, distributing
social security allowances, opening government accounts,
conducting financial and business literacy programs for rural
communities, and managing government grant distributions
for earthquake reconstruction efforts.

ANNUAL 41
REPORT 2023-24
 TRADE FINANCE
Siddhartha Bank provides specialized trade finance solutions The Bank actively participates in trading across local and
designed to support customers engaged in both domestic international money markets, capital markets, foreign
and international trade. With a dedicated Centralized exchange markets, and bullion markets. When making
Trade Operations (CTO) team comprising of experienced investment decisions, the Bank prioritizes safety, liquidity,
trade professionals, backed by an extensive network of return, and compliance.
international correspondent banks, the Bank ensures
seamless delivery of trade finance services, including letters The Treasury and Investment Banking Department offers the
of credit and bank guarantees. following key services to its valued customers:

In addition to standard trade finance offerings, the Bank  Competitive Exchange Rates
provides customized instruments such as bid bonds and
 Hedging Exchange Rate Risk
performance bonds tailored to meet specific client needs.
As a member of the International Finance Corporation’s (IFC)  Sales Agent and Market Maker for Bond
Global Trade Finance Program (GTFP) as an issuing bank,
 Bullion Dealing
the Bank benefits from IFC-assigned credit lines, enabling
confirming banks to receive partial or full guarantees
The department also oversees the Correspondent Banking
covering payment risks on various trade transactions.
Relationship of the Bank and takes a proactive approach
in establishing and maintaining Nostro, Vostro, and RMA
REMITTANCE
relationships with Banks globally to expand the Bank’s cross-
Siddhartha Bank introduced its online remittance service,
border business through correspondent banking. With an
“SBL Remit,” in 2008, starting from Qatar, to offer fast and
extensive network of correspondent banks, the department
reliable services to Nepalese working abroad. Since then, it
efficiently manages trade finance transactions, treasury
has expanded to countries including Japan, Malaysia, Oman,
payments, inward and outward payments, and other related
the UAE, South Korea, Kuwait, the USA, European nations, and
tasks.
Australia—strengthening its global presence to better serve
migrants.
The department adheres to the regulations of Nepal Rastra
Bank and the Bank’s policies and standard operating
The Bank operates a dedicated Remittance Business Unit
procedures in its daily activities.
focused on secure and efficient service delivery. In addition
to online remittance, it supports Nepali migrants in opening
accounts through Relationship Officers stationed in major ANCILLARY SERVICES
remittance corridors.
Siddhartha Bank offers a range of ancillary products
Two key products—“Siddhartha Remit Account” and “SBL and services designed to meet the evolving needs of its
Premium Remit Account”—cater specifically to Nepali customers in the dynamic banking sector. Besides traditional
migrants. The latter is designed for workers with valid labor banking services, the Bank provides innovative, technology-
or work permits issued by the Government of Nepal, offering driven solutions such as mobile banking, internet banking,
direct remittance services, a secure banking experience, and mobile ATMs, ensuring secure and convenient access to
and access to a 10% IPO reservation quota in Nepalese banking services anytime, anywhere. The following sections
companies. These accounts encourage formal remittance provide a detailed overview of the various ancillary products
channels, promote financial inclusion, and support long-term offered by the Bank.
financial growth.
CARD FACILITIES
To ensure efficient domestic distribution, Siddhartha Siddhartha Bank meets the evolving banking needs of its
Bank has partnered with banks, financial institutions, and customers with a diverse range of card services, including
remittance companies across Nepal. It currently operates Debit, Credit, and Prepaid cards. The Bank has partnered
over 5,000 active payout locations and utilizes 196 branches, with Uno Internet Venture to offer exclusive discounts to Uno
especially in key remittance inflow regions, to facilitate fast Credit Cardholders at participating outlets. Additionally, it has
and widespread access. introduced co-branded credit cards, such as the SBL Round
Table Credit Card, SBL Rotary Credit Card, SBL NMA Credit
With a strong international and domestic network, Card and SBL NYEF Credit Card in collaboration with partner
Siddhartha Bank remains committed to supporting Nepali organizations.
workers abroad and strengthening the country’s remittance
ecosystem. The Bank also provides a variety of prepaid card options,
including the E-Com Card, and Prepaid Travel Card for
TREASURY & INVESTMENT BANKING international use. Customers can conveniently use SBL
Siddhartha Bank’s Treasury and Investment Banking Visa Debit and Credit Cards at ATMs and POS terminals
Department, with a dedicated team of dealers, is committed across Nepal and India. SBL Prepaid Cards allow for cash
to addressing the diverse needs of its customers. Equipped withdrawals and payments without requiring a dedicated
with dedicated software for live rate streaming, messaging, bank account. The Domestic VISA Prepaid Card is valid in
and trading platforms from international banks, the treasury Nepal and India, while the International VISA Prepaid Card
desk ensures access to competitive prices and liquidity at or Travel Card enables global transactions without carrying
all times, allowing the Bank to offer customers competitive physical foreign currency.
exchange rates.

ANNUAL
42 REPORT 2023-24
Additionally, Siddhartha Bank introduced the Nari Debit Card,
a specially designed debit card tailored for women, where
0.10% of transactions made through POS and E-commerce will
be contributed to the women’s health welfare.

MOBILE ATM
Siddhartha Bank’s Mobile ATM offers customers the
convenience of cash withdrawals, balance inquiries, and
mini statement viewing while on the move. Housed within a
vehicle, this ATM is designed to travel to different locations,
ensuring easy access to banking services. The Bank SMART TELLER
strategically deploys the Mobile ATM in high-footfall areas, The Bank provides a QR code-
including exhibitions, trade shows, popular tourist spots, and based cash withdrawal service
venues hosting local festivals. through BankSmart XP, allowing
customers to withdraw cash from its
MOBILE BANKING branches without needing a physical card.
Siddhartha Bank provides a comprehensive mobile banking This feature is especially useful for those who
solution called BankSmart XP that enables registered may not have their card on hand but require
customers to conveniently manage their finances. Users immediate access to cash.
can perform various banking activities, including balance
inquiries, fund transfers, mini statement viewing, merchant POS
payments, mobile top-ups, and utility bill payments, all from As the use of debit and credit cards continues to grow,
their mobile devices. This service is accessible via both a the Bank has expanded the deployment of POS devices at
web-based platform and a simple SMS interface. Additionally, various merchant locations to enhance convenience for
registered customers can utilize BankSmart through web cardholders.
channels for conducting both financial and non-financial
transactions.
QR PAYMENT
To enhance customer convenience and promote digital
CASH AND CHEQUE DEPOSIT KIOSKS
transactions, the Bank offers a ‘Scan to Pay’ service. This
To streamline the cash and cheque deposit process, the
feature allows customers to scan QR codes using the Bank’s
Bank has set up deposit kiosks at various branches. These
mobile banking app for seamless payments. Currently, the
machines are located in key branches and are accessible
Bank has 41,759 QR payment partners nationwide, a number
24/7, providing customers with round-the-clock banking
that continues to grow, significantly contributing to the rise
services.
of digital payments.

ATM
Siddhartha Bank operates a nationwide network of 227 ATMs
and is actively expanding its reach by identifying strategic
locations to enhance accessibility for customers. The
Bank’s ATMs now feature cardless cash withdrawal, offering
added convenience. Additionally, SBL ATMs are compatible
with major payment card networks, including Visa and
MasterCard, ensuring seamless transactions.

VIDEO BANKING
This allows customers to avail banking services remotely
such as KYC updates, CRN registration and meroshare
registration.

24/7 CUSTOMER CARE

Providing exceptional customer support through its
Siddhartha Care Service, available 24/7 via multiple
channels: phone, email, whatsapps, viber.

OTHER SERVICES
Siddhartha Bank offers a variety of supplementary services,
including Siddhartha Safe Deposit Lockers and Demat
accounts, alongside its standard banking offerings.

ANNUAL 43
REPORT 2023-24
 CHAIRMAN’S
MESSAGE
As we reflect on the fiscal year 2023-24, Siddhartha Bank succeed in an increasingly competitive and rapidly evolving
remains steadfast in its commitment to driving meaningful world. The growing awareness of sustainability among
change in Nepal’s economic landscape. In FY 2023-24, Nepal’s youth provides a significant opportunity to create
Nepal’s economy showed signs of recovery, despite ongoing positive change.
global and domestic challenges. The country’s GDP is
expected to grow by 3.87% in 2023-24, signaling a gradual Sustainability is a critical component of our strategy,
recovery from the economic slowdowns experienced and it is one that we integrate into every aspect of our
in previous years. Key sectors such as agriculture, operations. We recognize the importance of incorporating
manufacturing, and services have demonstrated resilience, Environmental, Social, and Governance (ESG) principles into
with agriculture continuing to play a central role in the our business practices. At Siddhartha Bank, we are dedicated
nation’s economic activity. However, challenges such as to financing green initiatives, supporting the growth of
persistent inflation, geo-political tensions, higher interest rate MSMEs, and backing projects that create tangible social and
globally, and external economic pressures continue to pose environmental benefits. By aligning our business strategy
risks to the country’s growth potential. with sustainable development goals, we aim to contribute
to the betterment of society while maintaining the financial
Amid these economic challenges, Siddhartha Bank has profitability necessary for long-term success. Through
been able to maintain healthy financial performance and our efforts to promote responsible and ethical business
profitability in the FY 2023-24 attributable to its strong risk practices, we continue to minimize our environmental
management framework, high standards of compliance footprint and maintain the highest standards of corporate
and corporate governance, effective management, a team governance.
of dedicated employees and ever supportive customers
and stakeholders. At the end of FY 2023-24, the Bank’s Paid- Looking forward, while the global economic environment
Up Capital amounted to NPR 14.09 billion, while the Bank remains uncertain, we are optimistic about Nepal’s recovery
generated Net Profit of NPR 3.08 billion, out of which NPR 1.46 trajectory. We anticipate that economic growth will gradually
billion has been appropriated to Debenture Redemption strengthen, driven by the resilience of the Nepali people and
Reserve, which has been created for the outstanding the youth who will increasingly shape the country’s future.
debentures and shall be ultimately Siddhartha Bank is committed to its core
distributed to the shareholders after values and remains focused on enhancing
maturity of the debentures. The Bank
“We remain its digital banking capabilities, expanding
also kept its Non-Performing Assets support for sustainable development
(NPA) ratio at a manageable 2.17%,
resolute in our initiatives, and building enduring relationships
reflecting our commitment to prudent pursuit of our motto, with all stakeholders.
risk management. Understanding As we continue to build on our success,
the current market challenges, we “Relationship we remain resolute in our pursuit of our
declared a cash dividend of 4%, motto, “Relationship Forever,” and in our
ensuring that our shareholders receive Forever,” and in dedication to creating long-term value for
continued value amidst challenging our customers, employees, shareholders, and
times. our dedication communities. I extend my sincere gratitude
to all our employees, customers, regulators,
Our focus on empowering the nation’s
to creating long- shareholders, and stakeholders for their
youth and fostering sustainable term value for unwavering trust and support. Together,
development remains at the core we will contribute to a prosperous and
of our strategy. The youth of Nepal our customers, sustainable future for Nepal, empowered by
represent a dynamic force for its youth and guided by a shared vision for a
innovation and growth, and Siddhartha employees, brighter tomorrow.
Bank is dedicated to providing
them with the necessary resources, shareholders, and Thank you.
products/services and opportunities to
communities.”

ANNUAL
44 REPORT 2023-24
MANOJ KUMAR KEDIA
CHAIRMAN

ANNUAL 45
REPORT 2023-24
 SUNDAR PRASAD KADEL
CHIEF EXECUTIVE OFFICER

ANNUAL
46 REPORT 2023-24
CEO’S
MESSAGE
Dear Stakeholders,

In FY 2023-24, despite gradual improvement, the keep them at a manageable level and below the industry
global economic recovery remains sluggish and average. Despite the challenging business scenario, the
uneven. While the economic growth and inflation in Bank was able to maintain its assets quality and contain
developed economies are returning to normalcy, the NPA at 2.17%.
the majority of the emerging and developing
countries are still in the recovery phase, with Increased remittance inflows and sluggish loan demand
inflation still being at a higher level. As a result, a led to ample liquidity in the banking system, and the Bank’s
number of central banks around the world have total deposits increased by 7.15% in the FY, and reached NPR
kept policy rate persistently high. Despite some 244.91 billion. Amidst lack of loan demand and increased
challenges, Nepal’s domestic macroeconomic liquidity, we increased our investment portfolio by 5.48%
situation continues to recover and economic activity which helped the Bank generate competitive return on
has picked up. Inflation is subdued, the external the funds. Achieving a net profit of NPR 3.08 billion, despite
sector is robust while interest rates on deposit and sluggish economic activity and various challenges, is a
lending are declining due to excess liquidity in the reasonable outcome. Valuing the importance of dividend
banking system. Demand for credit is sluggish while to our shareholders, the Bank opted to provide 4% cash
the ratio of Non-Performing Loans for the Banking dividend considering the stressful market scenario. The
industry as a whole has increased. Despite these Bank is committed to support its stakeholders during these
headwinds, Siddhartha Bank remained steadfast challenging times.
in its commitment to ensuring its financial stability,
growth, resilience. Our credit risk management framework has been
strengthened with improved monitoring systems, regular
In FY 2023-24, the Bank strategized to attain a asset reviews, and a focus on early intervention strategies.
conservative growth in its overall credit portfolio We have enhanced our credit assessment processes
while focusing on portfolio shift to Retail and MSMEs. to ensure that we are lending to viable and sustainable
Further, we aligned our strategy with the central businesses. Additionally, we have invested in training our
bank’s accommodative monetary policy stance staff to better identify potential risks and address them
to enhance the domestic production capacity by before they evolve into problematic loans. These measures,
channeling financial resources along with a focused approach to asset
to the productive sector rather recovery, have enabled us to maintain our
than merely focusing on credit
“Our credit risk NPA ratio well below the industry average.
growth. In FY 2023-24, our total
credit reached NPR 203.54
management In line with our digital transformation
billion, an increase of 6.64% framework has been commitment, we modernized banking
vis-à-vis previous FY. However, services significantly. The implementation of
we recognize that the growing strengthened with an end-to-end Loan Management System
percentage of non-performing (LMS) streamlined credit processing, while
assets (NPAs) remains a concern improved monitoring Business Process Automation (BPA) and
in the banking sector, including Customer Relationship Management (CRM)
for us. We understand that systems, regular platforms enhanced operational efficiency
maintaining asset quality is and customer engagement. Additionally, we
crucial for the stability of the
asset reviews, introduced digital features such as Card-less
Bank and the financial system
as a whole. As a part of our
and a focus on withdrawals and Cash Deposit Machines
(CDMs), making banking more accessible
proactive approach, Siddhartha early intervention and efficient. Our 24-hour call center and
Bank has implemented several video KYC services further strengthened
measures to manage and strategies.” customer support, ensuring seamless service
contain NPAs, ensuring that we delivery.

ANNUAL 47
REPORT 2023-24
 As part of our long-term vision, we are actively We remain committed to youth empowerment. Recognizing
investing in technology to create a seamless, young entrepreneurs as key drivers of innovation and
efficient, and personalized banking experience for economic progress, we introduced tailored financial
our customers. By expanding our digital offerings, products, facilitated startup financing, and strengthened
including mobile banking apps, digital wallets, and strategic partnerships. The IFC syndicated loan facility—the
AI-powered tools, first of its kind in Nepal—underscored our commitment to
we continue to meet youth-led enterprises and MSME development. Additionally,
“We have reinforced the expectations of our digital banking initiatives cater to the evolving needs of
tech-savvy youth who tech-savvy young consumers, offering seamless financial
our commitment demand convenience solutions that enhance accessibility and convenience.
and speed in their Through financial literacy programs, mentorship initiatives,
to sustainability, banking experience. and youth-centric banking solutions, we aim to equip the
with Environmental, The integration of younger generation with the necessary tools to succeed in
AI and automation an increasingly digital economy.
Social, and not only improves Looking ahead, we anticipate a more favorable economic
customer service landscape with lower inflation, stable interest rates, and an
Governance (ESG) but also reduces uptick in economic activities. As we navigate these evolving
operational costs conditions, our priority remains towards a sustainable
principles being and increases the growth, fostering financial inclusion, and enhancing digital
accuracy of our banking experiences. We are committed to strengthening
now central to our financial assessments. our role as a catalyst for Nepal’s economic transformation,
particularly in supporting the aspirations of the younger
business strategy.” We have reinforced generation. Our focus on continuous innovation, robust risk
our commitment management, and customer-centric strategies will ensure
to sustainability, with Environmental, Social, and that we remain at the forefront of the banking sector.
Governance (ESG) principles being now central to
our business strategy. In FY 2023-24, we expanded At Siddhartha Bank, we recognize and value the significance
financing for green projects, supporting renewable of organic and sustainable growth, made possible by the
energy initiatives and sustainable infrastructure support and trust of our stakeholders. I would like to take
development. In line with our ESG commitments, this opportunity to express my sincere gratitude to Nepal
we disclosed Scope 3 GHG emissions per the Rastra Bank and our Board of Directors for their continuous
Partnership for Carbon Accounting Financials guidance, trust, and support. We are also deeply grateful
(PCAF) standard, laying the foundation for a net- for the unwavering dedication of our employees, whose
zero strategy. Internally, we have adopted energy- tireless efforts have shaped the Bank into what it is today.
efficient operations, promoting paperless banking Additionally, I appreciate the trust our valued shareholders
and digital alternatives to minimize environmental and customers have placed in us, which has been
impact. We are also integrating ESG factors into our instrumental in the Bank’s growth. With the continued support
credit decision-making process, ensuring responsible of all our stakeholders, we remain committed to building
financing practices that align with long-term a stronger, more resilient banking future—contributing to
sustainability goals. Governance remains a priority, Nepal’s long-term prosperity.
with strict compliance with AML and KYC regulations,
ensuring the highest standards of regulatory Thank you.
adherence and transparency.

ANNUAL
48 REPORT 2023-24
 ANNUAL 49
REPORT 2023-24
 CUSTOMER
SUCCESS STORIES
SITAMAYA DHAKHWA
Proprietor, Aava The Soul Fashion

Sitamaya Dhakhwa, the founder of Aava The Soul Fashion, has

made her mark in Nepal’s fashion and boutique industry. Her
boutique, located in Pulchowk, is more than just a shop—it’s a
space that celebrates design and art. But her entrepreneurial
journey has seen its share of challenges.

Having been in the business for over 15 years, Ms. Dhakhwa

faced one of her toughest times during the COVID-19
pandemic. Her once-thriving boutique was on the brink of
collapse. With mounting uncertainty, she wasn’t sure whether
to continue or shut down.

That’s when Siddhartha Bank stepped in. Through the

Siddhartha Mahila Udhyamshil Karja, a loan program
designed for women entrepreneurs, she received much-
needed financial support. Introduced to the scheme by her
brother, Ms. Dhakhwa applied and got approved—marking a
turning point in her business journey.

“The loan helped me survive and even grow during the

toughest times,” she says. The Bank not only provided
timely support but also ensured smooth processes without
unnecessary hurdles. Today, Ms. Dhakhwa continues to
use other services like mobile banking and QR payments,
simplifying her daily transactions.

Looking ahead, she dreams of expanding Aava The Soul

Fashion and opening more branches, with Siddhartha Bank
as a continued partner in growth. She
urges aspiring women entrepreneurs “Siddhartha Mahila
to explore the Bank’s offerings: “Without Udhyamshil Karja
Siddhartha Bank, I might have lost
everything. That’s why I recommend gave me the chance
making them your business partner.” to revive and grow
Her story stands as an inspiring my business.”
example of resilience, vision, and the
power of timely support.

ANNUAL
50 REPORT 2023-24
JHALAK PRASAD SUBEDI
Executive Chairman, Sindhu Multipurpose Pvt. Ltd

Jhalak Prasad Subedi, Executive Chairman of Sindhu

Multipurpose Pvt. Ltd., runs the Sindhu Organic Farm &
Farmstay in Melamchi-1, Rokka Tole—offering organic farming
and immersive farmstay experiences.

Despite his dedication, Mr. Subedi faced major hurdles—

limited capital, tough terrain, and a market dominated by
intermediaries. As his businness required more resources, his
savings fell short, leaving him in need - until Siddhartha Bank
provided the essential support to keep his vision alive.

Through the Hire Purchase Loan from Siddhartha Bank,

he acquired a delivery van and also leveraged other
business loans to expand business. The Bank’s assistance
went beyond just financing—it helped with market access
and business growth. “The loan and support laid a strong
foundation for my business,” he shares.

His efforts bore fruit. Mr. Subedi was named the Best Farmer
in Sindhupalchowk (2079 BS), received the Presidential
Best Farmer Award (2080 BS), and ranked among Bagmati
Province’s top five farmers.

Looking ahead, he envisions turning his farm into a premier

agro-tourism destination with an agricultural research
center, organic garden, and wellness retreat.

To future agro-entrepreneurs, he “The name I

advises: “Challenges will come, but with
determination, planning, and the right
will always
partners like Siddhartha Bank, success is remember for
within reach.”
my progress
is Siddhartha
Bank.”

ANNUAL 51
REPORT 2023-24
 SUDIP KUMAR CHAUDHARY
Chairman, Him River Power Limited

Sudip Kumar Chaudhary, a Civil Engineering graduate

from Pulchowk Campus, is a bold entrepreneur in Nepal’s
hydropower sector. Inspired by his early work on a 3,200
KW mini-hydropower project, he committed to tackling the
country’s energy crisis during a time of severe load shedding.
Despite facing harsh terrain, natural disasters, manpower
shortages, and funding challenges, Mr. Chaudhary pressed
forward. He adopted a partnership model, engaged local
communities, worked closely with experts and consultants,
and collaborated with government agencies.

To overcome financial barriers, he turned to Siddhartha

Bank. Through timely loans, credit lines, and reliable banking
services, the Bank became a crucial partner in moving his
projects ahead. Today, he leads major initiatives including
the 16.26 MW Liping Khola Hydroelectric Project, the 24 MW
Super Seti, and the 128 MW Tamor Mewa.

Grateful for the Bank’s trust and support, Mr. Chaudhary

shares, “Siddhartha Bank strengthened the financial
backbone of my business. Their partnership brought stability
and helped me stay focused on building Nepal’s
“Siddhartha energy future.”
Bank will
Looking ahead, he plans to expand into solar
forever be energy and cable car projects, confident that
linked to my Siddhartha Bank will continue to power his
journey forward.
success.”

ANNUAL
52 REPORT 2023-24
LAKSHMAN NEUPANE
Owner, Thumki Resort

Leaving behind the hustle of Kathmandu, a passionate

entrepreneur returned to his roots in Panauti-11, Balthali,
Kavre, with a dream to build something meaningful in his
hometown. That dream became Thumki Resort—a peaceful
getaway built not just for business, but for community benefit
and sustainable tourism.

With strong family support and a vision to create a unique

experience, Thumki Resort quickly gained popularity. Despite
rough roads, repeat visitors became common, and even
foreign guests began seeking bookings. “The love from our
customers is our biggest reward,” he shares.

Like any growing business, capital was a key need. From the
moment he presented his plan, Siddhartha Bank showed full
confidence and support, handling all financial arrangements
under one roof.

His long-standing relationship with Siddhartha Bank proved

vital, helping him expand further with other loans and
ventures. “Their trust gave me the push I needed to move
forward.”

Today, the resort is thriving—reaching “Having a bank that

breakeven in its first month. He’s now says, ‘We are here
planning to grow even more and
encourages young entrepreneurs to when you need a
invest in their own communities: “Good loan,’ has given me
business is possible right here in Nepal.”
encouragement.”

ANNUAL 53
REPORT 2023-24
 ANNUAL
54 REPORT 2023-24
MANAGEMENT
REPORT

ANNUAL 55
REPORT 2023-24
 ECONOMIC
OUTLOOK
WORLD ECONOMY focus on developing key sectors such as technology and
As of 2023-24, the global economy faced slower growth, renewable energy. This growth was expected to accelerate
driven by several ongoing challenges. The war in Ukraine, to 4.2% in 2024, as these economies continue to benefit from
rising energy prices, and persistent supply chain disruptions structural investments and favorable demographic trends,
have contributed to high inflation, which reached 7.4% and increasing integration into global chain values.
globally in 2023. Central banks in advanced economies
have responded aggressively by raising interest rates to Inflation, which has been a key concern for the global
curb inflationary pressures. This tightening monetary policy economy, was expected to moderate in 2023 and 2024.
reduced consumer spending and investment activity, Global inflation, which peaked in previous years, was
leading to a significant slowdown in global growth, which forecasted to decline to 7% in 2023, further easing to 4.9% in
was projected to reach 2.8% in 2023. A slight recovery was 2024. In developed economies, inflation was expected to
expected in 2024, with growth forecasted to rise to 3.0% as moderate from 4.7% in 2023 to 2.6% in 2024, as the effects of
inflation will ease and economic activity will stabilize. central bank rate hikes and fiscal measures begin to take
In developed economies, growth decelerated sharply, hold. Meanwhile, inflation in emerging economies eased
with the U.S. economy growing by just 1.0% in 2023, and the from 8.6% in 2023 to 6.5% in 2024, although risks remain due
Eurozone facing a mere 0.7% expansion. This was largely to fluctuations in energy prices and commodity markets.
due to the higher interest rates and weakened consumer Despite this moderation, inflation was expected to remain
confidence, particularly in major economies such as the U.S., above target levels in many regions, continuing to pose a
Eurozone, and the U.K. These economies experienced weaker challenge for policymakers who will need to balance inflation
domestic demand and fiscal constraints which contribute control and support economic growth.
to the subdued growth outlook. However, a modest rebound
was expected for 2024, with growth forecasted to rise to 1.4%, Looking ahead to 2024-25, the global economy is expected
though it will remain below historical growth averages. to experience a modest recovery, though growth will remain
constrained due to several ongoing risks. Global growth is
On the other hand, emerging and developing economies projected to pick up slightly to 3.0% in 2024, with a further
showed stronger resilience. These economies were expected recovery to 3.1% in 2025. However, this recovery will be
to grow by 3.9% in 2023, supported by robust domestic gradual, as the global economy continues to adjust to the
demand, investments in infrastructure, and strategic

ANNUAL
56 REPORT 2023-24
impacts of higher interest rates and the persistent effects Several risks could impact the economic outlook for 2024-25.
of past crises. In developed economies, growth is expected Geopolitical tensions, particularly the ongoing conflict in
to remain sluggish, with a slight rebound to 1.4% in 2024 Ukraine, and tensions in other regions such as Asia and the
and a limited recovery to 1.6% in 2025. These economies will Middle East, could disrupt global trade and energy markets.
continue to face challenges from tight monetary policies, If these tensions escalate, they could lead to disruptions in
which will reduce investment and consumer spending. The energy supply and further volatility in global energy prices.
U.S. and Eurozone are expected to grow at a slower pace, Energy price fluctuations will continue to be a significant risk
with the Eurozone projected to grow by 0.7% in 2024 and 1.1% for both developed and emerging economies, as supply
in 2025. disruptions or price hikes could drive inflation and hinder
recovery. Additionally, interest rates are expected to remain
In contrast, emerging and developing economies are elevated, particularly in developed economies, which could
expected to continue their recovery, with growth forecasted reduce investment and consumption, particularly in sectors
to reach 4.2% in 2024 and 4.3% in 2025. These regions, such as housing and durable goods. Policymakers will need
particularly India, Brazil, and Southeast Asia, are expected to remain vigilant and adopt a balanced approach to
to drive global growth, supported by strong domestic mitigate these risks while supporting sustainable growth.
consumption, infrastructure development, and a growing
middle class. China, however, may experience slower growth ECONOMY OF THE COUNTRY
due to structural challenges in its economy. Inflation is During 2023-24, Nepal’s economy experienced modest
expected to continue its downward trend globally, with a growth, estimated at around 4-5%, falling short of the
moderation to 4.9% in 2024 and a further easing to 3.6% in government’s target of 6% due to the persistent effects
2025. In developed economies, inflation is forecast to stabilize of the COVID-19 pandemic, structural challenges, and
at manageable levels, with U.S. inflation expected to fall to external pressures. Inflation remained elevated, averaging
2.0% by 2025. In developing economies, inflation is expected 6-7%, driven by higher food and fuel prices, supply chain
to ease from 6.5% in 2024 to 5.0% in 2025, although risks disruptions, and a depreciating Nepalese rupee.
remain due to energy price volatility and global commodity
market fluctuations.

ANNUAL 57
REPORT 2023-24
 GROSS DOMESTIC PRODUCT (GDP) Gross Domesc Product (Current Price)
Foreign employment trends remained strong, with a steady
NPR in Billion Real GDP at Purchasers' Price outflow of workers seeking opportunities abroad, particularly in
the construction, hospitality, and domestic work sectors. Despite
5.63% the economic benefits of remittances, the reliance on foreign
4.84%

5,704.84
employment highlighted structural issues in the domestic labor

5,348.53
market, including a lack of job creation and underemployment.

4,976.56
4,352.55
3,888.70

3.87%
On the fiscal side, the government focused on increasing
1.95%
infrastructure investment, especially in roads, energy, and water
resources, though slow project implementation remained an issue.
Bureaucratic delays and political instability were some of the
-2.37% factors that slowed down the pace of infrastructure development.
2019-20 2020-21 2021-22 2022-23 2023-24

During 2023-24, Nepal’s tourism sector showed signs of recovery

Fiscal constraints persisted, with lower-than-expected after the severe impact of the COVID-19 pandemic, though it
revenue collection and rising public debt, though it remained remained below pre-pandemic levels. Tourist arrivals increased
manageable at around 40% of GDP. The Nepal Rastra Bank significantly compared to the previous years, driven by the
maintained tight monetary policy to control inflation, but reopening of international borders, eased travel restrictions, and
high interest rates constrained private sector borrowing government efforts to promote Nepal as a premier destination for
and investment. Structural issues such as inadequate adventure, cultural, and eco-tourism. The government launched
infrastructure, political instability, and slow reforms continued several initiatives, such as the “Visit Nepal 2023-24” campaign, to
to hinder foreign direct investment and economic progress. attract tourists and improve hospitality services, but the results
were mixed due to slow implementation and limited marketing
Agriculture, a critical sector in Nepal, saw a notable increase reach.
in production in 2023-24, helping stabilize the economy,
particularly in rural areas. Moreover, the hydropower sector Looking ahead to 2024-25, Nepal’s economy is expected to see
contributed significantly to the economic recovery, with modest growth of 5-6%, driven by a recovery in tourism, strong
over 450 MW of new electricity generation capacity, further remittances, and government-led infrastructure projects. Tourist
boosting both domestic supply and export potential. arrivals are projected to approach pre-pandemic levels, supported
by improved air connectivity, better infrastructure, and diversified
Inflation, which had been a persistent concern in Nepal, was offerings like adventure sports and cultural festivals. Remittances
expected to moderate slightly during 2023-24. However, will remain robust, stabilizing foreign exchange reserves and the
inflation remained driven by fluctuations in global food balance of payments, while efforts to boost exports in hydropower,
and energy prices, which continued to have an impact on agriculture, and handicrafts may help narrow the trade deficit.
domestic cost levels. In this period, inflation hovered around However, challenges such as global economic uncertainty,
5.4%, largely influenced by the cost of essential goods. climate change, and political instability pose risks. To ensure
sustainable growth, Nepal needs to focus on diversifying the
Nepal’s trade deficit remained a significant challenge due economy, enhancing infrastructure, improving trade connectivity,
to the country’s heavy reliance on imports, which grew and promoting sustainable tourism practices. Careful policy
modestly but were insufficient to narrow the trade gap. The management and reforms will be crucial to navigating these
trade deficit continued to strain the balance of payments challenges and unlocking the country’s economic potential.
(BoP), though it was partially offset by robust remittance
inflows, which grew by approximately 10% and accounted CONDITION OF FINANCIAL SECTOR
for nearly 25% of GDP. These remittances, played a critical During fiscal year 2023-24, significant developments were
role in stabilizing the BoP and maintaining foreign exchange witnessed in the Banking and financial sector, characterized by
reserves, which stood at around USD 10-11 billion by the robust deposit growth and moderate loan expansion. Deposits
end of 2023-24, sufficient to cover about 8-9 months of held by banks and financial institutions increased by 13 percent
imports. However, the reserves faced pressure due to the surpasing the previous year’s increase of 12.30 percent. As of
depreciation of the Nepalese rupee against the U.S. dollar mid-July 2024, the distribution of deposits across current, savings,
and rising import costs. and fixed accounts stood at 5.8 percent, 30.3 percent, and 56.4
percent respectively. This marked a shift from the preceding year’s

GROSS FOREIGN EXCHANGE RESERVE BALANCE OF PAYMENT/REMITTANCE

NPR/USD in Million NPR in Billion
(252.36)
2019-20 1,007.31

2019-20 1,215.80 9.51 285.82

2020-21 1,240.69
2020-21 1,539.36 11.71
2021-22 502.49
1,445.32
2021-22 2,041.10 15.27
2022-23 297.72
839.03
2022-23 1,844.94 13.89

2023-24 284.41
2023-24 2,369.08 17.05 900.58

BOP(-Deficit) Workers' Remiances

ANNUAL
58 REPORT 2023-24
distribution of 7.7 percent, 26.6 percent, and 58.9 percent respectively, reflecting a growing preference for savings accounts
over current and fixed deposits. Institutional deposits constituted a significant portion, comprising 36.2 percent of the total
deposits, slightly lower than the figure of 36.6 percent recorded as of mid-July 2023.

On lending side, loans extended by banks and financial institutions to the private sector grew by 5.8 percent as compared to
previous year’s increase of 3.8 percent. The distribution of these loans showed a slight reallocation, with 63.3 percent going
to the non-financial institutional sector and 36.7 percent to the individual and household sector. In the previous year, these
shares were 62.7 percent and 37.3 percent, respectively.

Commercial banks saw 5.8 percent increase in a credit flow to the private sector. As of mid-July 2024, 66.5 percent of the loans
invested by banks and financial institutions were secured against real estate and 13.2 percent were mortgaged to current
assets (agricultural and non-agricultural goods). This represented a shift from mid-July 2023, when 68.0 percent of loans
were tied to real estate and 11.6 percent to current assets. Sector-wise, loans to key economic sectors demonstrated varied
growth rates in FY 2023-24. Loans to the agricultural sector increased by 0.9 percent, loans to the industrial production sector
increased by 8.8 percent, loans to the transport, communication and public service sectors increased by 16.7 percent, loans
to the wholesale and retail trade sector increased by 1.5 percent, and loans to the service industry sector increased by 6.2
percent. These trends highlight a diversification in credit allocation, with a focus on industrial production and infrastructure-
related sectors, alongside steady support for agriculture and trade. Overall, the Banking sector’s performance reflects a
balanced approach to deposit mobilization and credit expansion, with a focus on supporting economic growth across key
sectors.

CAPITAL MARKET CONDITIONS

The Nepal Stock Exchange (NEPSE) demonstrated a positive performance in FY 2023-24, reflecting growth in key indicators such
as the NEPSE Index, market capitalization, and the number of listed companies.

As of mid-July 2023, the NEPSE Index rose to 2,240.41, up from 2,097.1 in mid-July 2023, marking an increase of 6.83 percent. This
upward trajectory was accompanied by a significant rise in market capitalization, which grew by 15.29 percent, from NPR
3,082.52 billion in mid-July 2023 to NPR 3,553.68 billion in mid-July 2024. Similarly, the number of companies listed in NEPSE has
reached to 270 as of mid-July 2024 which was 254 as of mid-July 2023, indicating growing and diversified market.

Base Rate
TOTAL DEPOSITS/ CREDIT TO PRIVATE SECTOR DEPOSITS, LENDING, BASE RATE Weighted Average Deposit
NPR in Million %
Rate of Commercial Banks
Weighted Average Lending
Rate of Commercial Banks
2019-20 5,082.77
4,621.10

12.30%
2020-21 5,710.02 11.62%
4,797.03 11.08%
9.93%
6,452.39 8.55%
2021-22 10.03%
5,073.97 9.54%
9.06%
7.86% 8.00%
6,107.22 7.41% 7.01%
2022-23 6.46%
4,994.24
5.77%
4.62%
2023-24 6,697.73
5,357.43

Total Deposits BFIs Credit to Private Sector 2019-20 2020-21 2021-22 2022-23 2023-24

Among the listed companies, the number of BFIs and Insurance companies are 132, while 91 are hydropower companies, 22
manufacturing and processing industries, 7 hotels, 7 investment companies, 4 trading organizations and 7 companies related
to other sectors. In terms of market capitalization, banks and financial institutions and insurance companies have a largest
share of 58.6 percent in the market capitalization. Similarly, the share of hydropower companies is 15.1 percent, the share of
investment companies is 7.3 percent, the share of production
and processing related companies is 6.4 percent, the share
of hotels is 2.8 percent, the share of trading companies is 0.5
percent and the share of other companies is 9.2 percent.
2883.4

2009.5 2097.1
2240.4 In FY 2023-24, the paid-up value of shares listed on NEPSE stood
at NPR 825.05 billion, representing 8.32 billion shares. During
1362.4
the year, securities worth Rs.130.47 billion were listed at NEPSE
comprising ordinary share worth Rs. 86.81 billion, right shares
worth Rs.21.98 billion, bonus share worth Rs.21.65 billion, and FPO
46.1 92.2 57.7 57.6 62.3

worth Rs.30.23 million. This indicates active participation and

2019-20 2020-21 2021-22 2022-23 2023-24
capital mobilization in the stock market, with a focus on equity
Annual
instruments.
NEPSE Index (Closing) Market Capitalizaon/GDP

ANNUAL 59
REPORT 2023-24
 REVIEW OF OPERATIONS OF SBL IN FY 2023-24 INCLUDING SEGMENTAL ANALYSIS
AND SECTION ON EXTERNAL FACTORS AFFECTING THE PERFORMANCE OF THE BANK
DURING THE YEAR

REVIEW OF OPERATIONS

LOANS
The table covers Total Loans (NFRS-based) and Gross provisions have increased by 21% from 2022-23 to 2023-24
Loans for two fiscal year (2022-23 to 2023-24) and includes which might indicate a more cautious approach by the
additional metrics such as Deprived Sector Loans, Priority lender in preparing for potential loan defaults. There’s a
Sector Loans, Non-Performing Loans (NPL) to total loan%, small increase in the ratio of non-performing loans (NPL)
and the Loan Loss Provision (LLP). During the review period, to total loans i.e 0.16% from 2022-23 to 2023-24. The Loan
there is 6% increase in total loan (NFRS- based). There has Loss Provision (LLP) to Non-Performing Loan (NPL) ratio has
been steady growth over the years, showing a healthy increased by 6.59% from 2022-23 to 2023-24.
increase in the NFRS-based loan amount. Total loan (gross)
has increased to 6.63% for the review period. The increase Agriculture, Forestry & Beverage Production related has
in total gross loan is slightly higher than the NFRS-based most significant contribution on the Bank’s loan. During the
loan, suggesting a small shift between the two categories review period, agriculture, forestry & beverage production
over time. The Bank invested NPR 9,993.64 million in deprived contributed NPR 8,976 millions of total loan which has
sector lending. Similarly, the priority sector lending (excluding increased by 27.71% in comparison to previous year. While
eligible investments in energy & agricultural bonds) of the loan in other sector such as mining, constructions and others
Bank at the end of reporting period was 27.63%. Loan loss are seen declining.

2022-23 2023-24 PERCENTAGE

PARTICULARS
NPR IN MILLION NPR IN MILLION INCREMENT/(DECREMENT)
Total Loan (NFRS Based) 189,153.52 201,241.21 6%

Total Loan (Gross) 190,874.67 203,538.04 6.63%

Loan Loss Provision 4,969.95 6,021.08 21%

LLP to NPL Ratio 129.70% 136.29% 6.59%

Npl to Total Loan % 2.01% 2.17% 0.16%

Deprived Sector Loan 9,959.30 9,993.64 4.91%

Priority Sector Loan 52,748.30 56,243.00 27.63%

Sector Wise Breakdown of Total Loan

Agriculture 17,095 15,644 -8.49%

Fishery 677 816 20.42%

Mining 627 621 -0.92%

Agriculture, Forestry & Bevarage
7,029 8,976 27.71%
Production Related
Non-Food Production Related 22,488 22,478 -0.04%

Construction 5,325 5,300 -0.48%

Electricity,Gas and Water 13,195 16,174 22.58%

Metal Production, Machinary and Electrical Tools 2,539 2,457 -3.20%

Transportation, Communications and Public Services 3,952 4,077 3.18%

Wholesaler and Retailer 45,675 47,643 4.31%

Finance, Insurance and Real Estate 11,462 12,740 11.15%

Hotel or Restaurant 7,470 7,675 2.74%

Other Service Industries 7,943 8,490 6.87%

Consumable Loan 32,456 38,900 19.85%

Local Government 151 151 0.00%

Others 12,790 11,396 -10.90%

ANNUAL
60 REPORT 2023-24
DEPOSITS
Total deposit of the Bank increased by 7.15% during FY 2023-24 and reached NPR 244,907.24 million. During the review period,
saving deposit and call deposit increased by 29.17% and 9.39% respectively whereas fixed deposit, current deposit & margin
deposit decreased by 1.30%, 6.09% and 28.55%. There is significant growth rate in saving deposit, indicating that saving deposits
have seen a strong rise, possibly due to dilution of fixed deposits portfolio. The foreign currency deposit of the Bank stood at
NPR 2,903.60 million at the end of reporting period which has decreased by NPR 43.47% from previous year. At the end of the
review period, the Bank had 1,922,821 deposit accounts. The growth in the number of accounts (12.44%) points to a positive trend
of expanding customer participation, potentially reflecting increased financial inclusion. The Bank is able to maintain ratio of
individual and institutional deposits as per the requirement of Nepal Rastra Bank at 71.91% & 28.08% respectively

2022-23 2023-24 PERCENTAGE

PARTICULARS
NPR IN MILLION NPR IN MILLION INCREMENT/(DECREMENT)
Deposits 228,568.33 244,907.24 7.15%

Institutional Customers 85,266.12 84,993.28 -0.32%

Individual Customers 143,302.21 159,913.96 11.59%

Local Currency 223,431.92 242,003.64 8.31%

Foreign Currency 5,136.41 2,903.60 -43.47%

Total Number of Accounts 1,710,123 1,922,821 12.44%

INVESTMENTS
Overall, there has been a decline in total investments in the review period, i.e., 17.48% decrease from 2022-23 to 2023-24 with
lower interest on fresh issuance of Government Securities, interest rates on shorter term investments and Standing Deposit
Facility almost in line with that of longer-term government security and perceived limited downside on the Government
Securities yield. Out of total investment, investment in development bonds, treasury bills, placements, equities, and bonds of
other BFIs accounted 63.66%, 4.46%, 17,26%, 12.10% and 2.47% respectively. The Bank is committed on investing in companies which
shall provide strategic advantage for the Bank in long run.

2022-23 2023-24 % TO TOTAL PERCENTAGE

PARTICULARS
NPR IN MILLION NPR IN MILLION INVESTMENT INCREMENT/(DECREMENT)

Investment 69,655.72 57,476.96 100.00% -17.48%

Equities 6,224.16 6,957.46 12.10% 11.78%

Bonds of Other BFIs 1,416.52 1,416.52 2.46% 0.00%

T-Bills 17,116.46 2,565.57 4.46% -85.01%

Citizen Saving Bonds 120.2 18.98 0.03% -84.21%

Development Bonds 36,800.68 36,589.23 63.66% -0.57%

Placements 7,977.70 9,929.21 17.28% 24.46%

Profit Earned During The Year

The Bank earned an operating profit of NPR 4,484.50 million in the reporting period, a decrease of 3.62% from previous year.
Similarly, the Bank earned net profit of NPR 3,080.03 million, a decrease of 2.74% from previous year. The net profit to total assets
(average) ratio of the Bank stood at 1.06% at the end of reporting period which was 1.15% in the previous year. The net profit to
net worth (average) ratio of the Bank stood at 11.54% at the end of reporting period which was 13.50% a year ago.

2022-23 2023-24 PERCENTAGE

PARTICULARS
NPR IN MILLION NPR IN MILLION INCREMENT/(DECREMENT)
Operating Profit 4,652.98 4,484.50 -3.62%

Net Profit 3,166.77 3,080.03 -2.74%

Net Profit/Total Asset (%) 1.15% 1.06% -0.05%

Net Profit/Net Worth (%) 13.50% 11.54% -1.96%

ANNUAL 61
REPORT 2023-24
 Income Earned During The Year
During the review period, the Bank earned total income of NPR 28,163.58 million, decreased by 5.83% from previous year.
The Bank earned majority of its total income from operating activities which accounts for almost 100% of total income. The
operating income of the Bank decreased by 5.82% to reach NPR 28,152.31 million, which was NPR 29,892.10 million in previous
year. Interest income constituted 91.31% of total income whereas fees and commission income, net trading income and
other operating income constituted 6.45%, 0.85% and 1.35% respectively. The Bank earned NPR 11.26 million from non-operating
activities. The non-operating income of the Bank decreased by NPR 2.21 million from previous year.

2022-23 % TO TOTAL 2023-24 % TO TOTAL

PARTICULARS
INCOME INCOME
NPR IN MILLION NPR IN MILLION
Operating Income 29,892.10 99.95% 28,152.31 99.96%

Interest Income 27,659.99 92.49% 25,716.03 91.31%

Fee and Commission Income 1,693.08 5.66% 1,815.39 6.45%

Net Trading Income 202.70 0.68% 239.84 0.85%

Other Operating Income 336.33 1.12% 381.05 1.35%

Non-Operating Income 13.47 0.05% 11.26 0.04%

Total Income 29,905.57 100% 28,163.58 100%

Breakdown Of Interest Income

During the review period, interest income of the Bank decreases by 7.03%, and total interest income during FY 2023-24 stood
at NPR 25,716.03 million. Interest Income from loans and advances was NPR 21.85 billion, 8.17% decrement compared to previous
year. Similarly, interest income from investments amounted NPR 3.61 billion, which was NPR 3.60 billion in previous year. In the
review period, the Bank had focused on investing in high return yielding instruments.

2022-23 2023-24 PERCENTAGE

PARTICULARS
NPR IN MILLION NPR IN MILLION INCREMENT/(DECREMENT)

Interest Income 27,660.00 25,716.03 -7.03%

Cash and Cash Equivalent 75.34 101.45 34.66%

Placement with Bank and Financial

26.29 37.74 43.54%
Institutions

Loans and Advances 23,789.57 21,846.95 -8.17%

Investment Securities 3,603.38 3,617.53 0.39%

Loan and Advances to Staff 165.42 112.36 -32.07%

Cost Incurred During The Year

During the review period, the Bank had incurred total cost of NPR 23,687.81 million which is decrement of 6.52% from previous
year. Interest expense and personnel expense of the Bank constituted majority of cost of the Bank with 75.08% and 12.57% share
of total cost. The Bank incurred fees and commission expense of NPR 389.05 million which has increased by NPR 41.60 million in
comparison to previous year. The impairment charges of the Bank has decreased by NPR 136.44 million in the reporting period
to stand at NPR 1,051.12 million at the end of FY 2023-24. The personnel expenses of the Bank increased by NPR 125.67 million
whereas other operating expenses has increased by NPR 68.19 million. The depreciation and amortization expense of the Bank
has also increased by NPR 30.14 million and stood at NPR 478.15 million at the end of FY 2023-24. The non-operating expense of
the Bank stood at NPR 20 million which was NPR 101.19 million in previous year.

ANNUAL
62 REPORT 2023-24
 % TO TOTAL
2022-23 2023-24 % TO TOTAL
PARTICULARS EXPENSE
EXPENSE
NPR IN MILLION NPR IN MILLION
Operating Expenses 25,239.11 99.60% 23,667.81 99.92%

Interest Expense 19,486.42 76.90% 17,785.96 75.08%

Fee and Commission Expense 347.45 1.37% 389.05 1.64%

Impairment Charge 1,187.56 4.69% 1,051.12 4.44%

Personnel Expenses 2,852.23 11.26% 2,977.90 12.57%

Other Operating Expenses 917.44 3.62% 985.63 4.16%

Depreciation & Amortization 448.01 1.77% 478.15 2.02%

Non-Operating Expenses 101.19 0.40% 20.00 0.08%

Total Expenses 25,340.30 100% 23,687.81 100.00%

Breakdown Of Interest Expense

During the review period, total interest expense of the Bank reached NPR 17,785.96 million which is decrement of 8.73% in
comparison to that of the previous year. Total interest expense on deposit reached NPR 15.50 billion, a 8.94% decrement in
comparison to previous year. Interest expense on various borrowings made from Nepal Rastra Bank stood at NPR 46.85 million
at the end of FY 2023-24 which was NPR 725.03 million in FY 2022-23. Similarly, interest expense on borrowing stood at NPR
925.50 million which was NPR 451.51 million in previous year. The interest expense on debt securities remain unchanged during
reviewing period.

2022-23 2023-24 PERCENTAGE

PARTICULARS
NPR IN MILLION NPR IN MILLION INCREMENT/(DECREMENT)

Interest Expense 19,486.42 17,785.96 -8.73%

Due to Nepal Rastra Bank 725.03 46.85 -93.54%

Deposits from Customers 17,026.86 15,504.00 -8.94%

Borrowing 451.52 925.50 104.98%

Debt Securities Issued 1,168.32 1,168.32 0.00%

Other 114.71 141.29 23.18%

Risk Assets Quality

The average risk weight of on balance sheet and off balance sheet items stood at 64.69% at the end of reporting period, an
increase of 2.07% from previous year. The average risk weight of on balance sheet items was 67.06% whereas the average risk
weight of off balance sheet items is 44.67%. At the end of reporting period, the average risk weight of on balance sheet items
increased by 0.21% whereas the average risk weight of off balance sheet items increased by 8.12%. The non-performing loans
of the Bank stood at NPR 4,417.87 million which is an increment of 15.29% in comparison to previous year. Similarly, the NPA% has
also increased to 2.17% which was 2.01% in previous year.

PERCENTAGE
PARTICULARS 2022-23 2023-24
INCREMENT/(DECREMENT)

Avg. Risk Weight-On Balance Sheet Items 66.85% 67.06% 0.21%

Avg. Risk Weight-Off Balance Sheet Items 36.55% 44.67% 8.12%

Total Avg. Risk Weight 62.63% 64.69% 2.07%

Non-Performing Loans (NPR in Million) 3,831.80 4,417.87 15.29%

NPA% 2.01% 2.17% 0.16%

ANNUAL 63
REPORT 2023-24
 Capital Adequacy Ratio
The Capital Adequacy Ratio (CAR) is a measure of how much capital the Bank has available, reported as a percentage of the
Bank’s risk weighted exposures. The purpose is to establish that the Bank has enough capital on reserve to handle a certain
amount of losses, before being at risk for becoming insolvent. The Capital Adequacy Ratio of the Bank at the end of reporting
period was 11.88%, which is 0.88% higher than the statutory requirement of 11%. Similarly, Tier I capital of the Bank stands at 9.38%
which is 0.88% higher than the statutory requirement of 8.50%. The risk weighted exposures of the Bank has increased by
4.64% in current fiscal year which was majorly caused by increase in risk weighted exposure for market risk. The total capital
of the Bank has decreased by 0.31% with decrement in Tier II capital. In the reporting period, the Tier-I capital of the Bank has
increased by 4.67% whereas Tier-II capital of the Bank has decreased by 15.37%.

2022-23 2023-24 PERCENTAGE

PARTICULARS
INCREMENT/ (DECREMENT)
NPR IN MILLION NPR IN MILLION
Tier 1 Capital 21,782.52 22,800.53 4.67%

Tier 2 Capital 7,203.05 6,095.76 -15.37%

Total Capital 28,985.56 28,896.29 -0.31%

Risk Weighted Exposure for Credit Risk 213,118.50 22,028.16 -89.66%

Risk Weighted Exposure for Operational Risk 9,904.18 11,337.76 14.47%

Risk Weighted Exposure for Market Risk 392.26 1,777.02 353.02%

Adjustments under Pillar II 8,943.85 9,742.35 8.93%

Total Risk Weighted Exposures (After adjustments

232,358.79 243,138.73 4.64%
of Pillar II)

Tier I Capital to Total Risk Weighted Exposures 9.37% 9.38% 0.00%

Tier I and Tier II Capital to Total Risk Weighted

12.47% 11.88% -0.59%
Exposures

NON FINANCIAL PERFORMANCE OF THE BANK

 Due to strategic move of the Bank to focus on CASA deposits at the time of liquidity surplus, saving deposits of the Bank
increased by 5.38% and fixed deposits reduced by 4.54%.

 Launched a new premium debit card product “Siddhartha Visa Platinum Debit Card” which elevated our services and this
provides our customers with more luxurious options.

 Similarly, on the auspicious occasion of International Women’s Day, the Bank launched “Siddhartha Nari Debit Card” in
conjunction with the Siddhartha Nari Bachat Khata which aligns with our ongoing commitment to social responsibility and
community engagement, especially in supporting women’s health and empowerment.

 Nari Bachat Campaign was launched which constituted the following features:
g
Free Debit Card for the first year
g
Free UNO Credit Card for the first year
g
Free BanksmartXP/SMS alert for the first year
g
50% discount on annual locker charges for the first year

 Marketing Campaign for locker was launched in which the bundled package of Safe Deposit Locker was offered with 50%
waiver on locker rental charges for first year, on saving deposits products.

 Loyalty Platform was successfully launched. Customers are awarded points for financial transactions they perform digitally.
The product type and transaction type covered are:
g
Debit Card- POS Transaction/E-com/AFT-MOCO
g
Credit Card- POS Transaction/E-Com/ Cash Withdrawal/AFT-MOCO
g
Prepaid Card - POS Transaction/E-com/AFT-MOCO

 Outbound Call Representatives are being used as a direct sales agents. The leads collected through different channels are
nurtured and only filtered leads are handed over to the branches as an opportunity.

ANNUAL
64 REPORT 2023-24
 The Bank has collected information from all branches  Similarly, the Bank has established Product Research &
regarding prospective customers (depositors/ borrowers) Development Division which identifies consumer needs,
of each locality and specific strategies are prepared to trends, and gaps in the market, analyzes competitors’
onboard these customers. products, and develops new products based on customer
feedback and market requirements.
 An agreement was signed with ‘Saral Banking Sewa’ to
identify quality leads for deposit, loan as well as ancillary  In order to depict core values internally and externally,
products of the Bank. Standard Posters is designed and placed in all branches
which states the Vision, Mission and Values of the Bank.
 Throughout the year various products and services were
launched. Some of the major products and services  In order to adopt to digital-first solutions, 1st phase of
launched during this year includes: Human Capital Management System was implemented.
Self-serving options on leave, travel, separation, employee
g
QR Loan
information and mobile application was launched.
g
Women Home Loan Services
 Learning & Development portal has been developed
g
Customer Care 24/7 Service and learning materials are digitally maintained making it
accessible to staffs to enhance their knowledge and skills.
g
Free Four Offer
g
Automation of Debit Card Services via BankSmart XP  Reward and recognition plays crucial roles in motivating
and retaining employees. The Bank implemented a
g
Cardless Withdrawal
scheme wherein the top 3 performing branches as per
g
UPI Payment their categorization were rewarded in each quarter.

g
EasyBank  The Bank has robust risk management framework which
encompasses regular risk assessments, formulation
 Responding to market demands, the Bank introduced of comprehensive policies and Standard Operating
the SBL Premium Remit Saving Account. This account Procedures (SOPs) and refinement of operational
primarily for foreign employment workers who are working procedures to align with evolving business dynamics. The
overseas by taking proper labour/work permit for GON. Bank formulated 3 new policies, 7 new SOPs and 2 new
This product encouraged foreign employment workers to product papers. Besides that, the Bank has continually
send the remittance directly into their accounts to eligible revised and updated its policies and SOPs. The Bank
employment reservation quota of 10% in every IPO issued reviewed 12 policies and 44 SOPs.
by Nepalese companies.
 The Bank has developed credit flow mechanism for
 In order to boost the sales of credit card, the Bank ran two approval of credit as:
campaigns
g
All retail loans shall be routed through credit
g
‘Go For Cards VII’ Campaign launched - able to enroll
underwriting department.
5,869 new credit cards in three months which is the
highest among all the preceding campaigns. g
All loans up to Rs. 1 crore shall be routed through credit
g
‘Go For Cards VIII’ Campaign launched - introduced underwriting department.
the compulsory use of CRM system in this campaign to
g
Capital based pricing has been rolled out.
track the identified leads’ conversion process; able to
solicit 2,180 new credit cards.
 The Bank has signed a contract with “Environmental
Management Centre Pvt. Ltd.” (EMC) for the establishment
 Execution of revised Organization Structure: New
of ESGMS in the Bank.
organization structure was duly executed in the 1st
quarter.
 The Bank has joined Partnership for Carbon Accounting
Financials (PCAF) on July 2023 and has to report GHG
 Major changes in organization structure are: creation
emission within 3 years of joining.
of verticals for business - Corporate, MSME, Retail and
HNI/ Liability Management; realignment of credit flow
 Development of 51 scenarios for AML scenario monitoring.
processes by creation of Credit Underwriting Department;
Out of which, 36 scenarios are related to transaction, 9
creation of Transaction Banking and International
scenarios are related to card & digital, 3 scenarios are
Business for special focus on transaction based fees
related to staff account monitoring and 3 scenarios are
income and exploring foreign tie ups.
related to loan monitoring.

 The Bank has established Data Analytics and BI Division

 Migration of Sanction Screening portal to Transaction
under Digital Marketing Department with manpower
Screening portal of Swift.
specializing in data analytics and statistics for leveraging
data to support decision-making and drive strategic  The Bank has implemented Audit Automation Software to
initiatives within the Bank. further strengthen audit functions.

ANNUAL 65
REPORT 2023-24
  The Bank has developed new in-house Data Warehouse (DWH) platform using Microsoft SSIS tool for ETL operations that
aggregates data from different sources into a single, central, consistent data storage which is used to support data
analysis, data mining and future AI & ML.

 Video Banking Solution deployed.

 The Bank is performing additional data mining using CRM platform for focused target assessment.

 Easybank digital platform has been developed in order to provide services as:
g
CASA / Loan Details
g
Loan Against Fixed Deposit
g
Loan Against QR
g
Block My Account
g
PAN Update.

 Establishment of a Data Center Infrastructure at the Head Office.

 Collateral Management System (CMS) developed in-house to incorporate collateral information of the customer.

 The Bank’s website experienced significant interest and interaction as per Google Analytics 4 (GA4).

FY 2022-23 FY 2023-24
PLATFORM
(3 MONTHS INFORMATION) (1 YEAR INFORMATION)

Page Views 513,492 4,810,408

User 153,976 1,218,252

New User 136,043 1,152,037

In FY 2022-23, the data is only of 3 months due to the transition from Universal Analytics (UA) to the more advanced Google
Analytics 4 (GA4) in April 2023 for more accurate data collection and analysis. But the information of FY 2023-24 is of full year
based on GA4.

 Social media platforms have become essential tools for communication, marketing, brand building and networking. To
connect with the younger generation (Gen Z), the Bank launched targeted campaigns across platforms like Facebook,
Instagram, X , LinkedIn, TikTok, YouTube and Viber. These initiatives led to significant growth in followers and enhanced the
Bank’s digital presence. This strengthened social media engagement has played a key role in attracting new customers
and improving the Bank’s ranking among commercial banks on Facebook.

FY 2022-23 FY 2023-24
PLATFORM RANK RANK GROWTH %
(FOLLOWERS) (FOLLOWERS)

Facebook 345,000 4th 394,610 4th 14%

Instagram 12,300 4th 14,514 4th 18%

X 2,701 3rd 2,734 3rd 1%

LinkedIn 6,019 4th 6,554 6th 9%

Youtube 3,800 8th 5,290 7th 39%

Viber 16,886 5th 14,831 3rd -12%

 In FY 2023-24, a range of digital marketing initiatives were undertaken to promote and enhance the online presence of
the Bank such as Search Engine Optimization Campaign (SEOs), Social Media Traffic Campaign, Google Display Network
advertisement, social medias community growth.

ANNUAL
66 REPORT 2023-24
SEGMENT ANALYSIS
REVIEW OF BUSNIESS SEGMENTS
The Bank has divided its operations into four key segments:
a) Banking b) Treasury
c) Remittance d) Digital Payment Operations

Additionally, Banking Segment is further segregated into COPORATE, MEDIUM and RETAIL based on the nature of portfolio. Below
is the detailed analysis of each segment and sub segment:

SEGMENT PROFITABILITY AND ASSETS

LIABILITIES Liabilies 2022-23 Liabilies 2023-24

NPR in Billion

Remiance 3.44
4.14

0.43
Payment Soluons
0.50
16.55
Treasury
5.18
265.52
Banking
287.52

285.98
Total
297.34

ASSETS
Assets 2022-23 Assets 2023-24
NPR in Billion

3.51
Remiance 4.14

0.61
Payment Soluons 0.54

Treasury 18.09
5.24
263.75
Banking 287.42
285.98
Total 297.34

TOTAL REVENUE FROM EXTERNAL CUSTOMERS Total Revenue from external customers 2022-23
NPR in Million
Total Revenue from external customers 2023-24

Remiance 90.49
78.08
569.26
Payment Soluons 576.18
4,097.05
Treasury 4,192.21

Banking 25,148.78
23,317.11
Total 29,905.58
28,163.58

PROFIT BEFORE TAX

NPR in Million
Profit before tax 2022-23 Profit before tax 2023-24

67.76
Remiance
94.90
175.53
Payment Soluons 170.10
1,537.92
Treasury
2,049.79

Banking 2,784.05
2,160.98
4,565.26
Total 4,475.77

ANNUAL 67
REPORT 2023-24
 SUB- SEGMENT ANALYSIS
LOAN PORTFOLIO
During the review period, the % of total loan portfolio for corporate, MSME and retail are 34.98%, 35.46% & 29.56% respectively.
Compared to previous year, corporate loan has increased by 8.04%, retail loan has increased by 7.14% whereas MSME loan has
decreased by 4.88%.

LOAN PORTFOLIO 2022-23

NPR in Billion 2023-24

203.54
190.87

71.19 72.17
65.90 68.82
56.16 60.17

Corporate MSME Retail Total

NPA

2022-23 2023-24
NPA NPA % (2022-23) NPA % (2023-24)
NPR IN BILLION NPR IN BILLION
Corporate 0.05 0.08% 1.17 1.65%

MSME 2.92 4.24% 3.33 4.61%

Retail 0.86 1.53% 1.52 2.53%

2022-23
NPA %
In Billion 2023-24

4.61%
4.24% 3.33
2.92

2.53%
1.65% 1.52
1.17 1.53%
0.86
0.08%
0.05

Corporate MSME Retail

ANNUAL
68 REPORT 2023-24
LOAN MIX

2022-23 2023-24
SEGMENT TYPE OF LOAN PRINCIPAL O/S NPA PRINCIPAL O/S NPA
NPR IN BILLION NPR IN BILLION NPR IN BILLION NPR IN BILLION
Term Loan 36.52 0.00 44.69 0.66

Overdraft 2.93 - 2.50 0.04

Trust Receipt Loan / Import Loan 3.03 - 3.15 0.04

Demand & Other Working Capital Loan 16.61 0.05 13.17 0.24
Corporate
Real Estate Loan 0.87 - 1.07 0.11

Hire Purchase Loan 0.51 0.01 0.44 0.01

Deprived Sector Loan 5.06 - 5.71 0.07

Others 0.37 - 0.47 0.01

Term Loan 17.14 0.50 26.27 0.91

Overdraftt 20.74 0.85 21.02 0.97

Trust Receipt Loan / Import Loan 0.95 0.02 1.03 0.02

Demand & Other Working Capital Loan 21.30 1.29 16.82 1.23

MSME Real Estate Loan 0.56 0.02 0.43 0.02

Margin Nature Loan 0.22 - 0.54 0.01

Hire Purchase Loan 2.99 0.15 2.59 0.12

Deprived Sector Loan 4.09 0.07 3.17 0.04

Others 0.84 0.01 0.31 0.02

Term Loan 25.67 0.38 44.26 1.00

Overdraft 3.26 0.08 3.34 0.11

Trust Receipt Loan / Import Loan - - - -

Demand & Other Working Capital Loan - - 0.21 0.00

Retail Real Estate Loan 13.26 0.11 3.08 0.08

Margin Nature Loan 3.85 0.03 5.25 0.08

Hire Purchase Loan 1.38 0.11 1.38 0.09

Deprived Sector Loan 1.30 0.04 1.11 0.02

Others 7.45 0.11 1.53 0.13

EXTERNAL FACTORS AFFECTING THE PERFORMANCE OF THE BANK DURING THE YEAR
Economic Slowdown: The anticipated economic revitalization under the coalition government did not materialize as expected.
This sluggish economic environment led to reduced demand in key sectors such as real estate and trade, affecting credit
expansion and overall economic activity.

Global Economic Uncertainties: Global economic conditions, including trade tensions and geopolitical events, influenced
Nepal’s economy. These external factors affected investor confidence and foreign investments, indirectly impacting the
Banking sector’s performance.

Delayed Capital Expenditure: The government’s inability to effectively utilize its allocated budget, especially in infrastructure
projects, meant that large sums of money remained unspent. Since government spending directly fuels economic activities,
slow capital expenditure reduced liquidity circulation in the market. This led to lower demand for bank loans, affecting the
Banks’ profitability.

Political Instability and Policy Uncertainty: Frequent changes in government and unstable policies created uncertainty in
banking activities.

ANNUAL 69
REPORT 2023-24
 ORGANIZATION STRATEGY ON MARKET DEVELOPMENT,
PRODUCT AND SERVICE DEVELOPMENT
Nepal’s youth hold the key to the nation’s progress and Approximately 60% of the Bank’s customers fall within
prosperity. As a generation full of ambition, creativity, and the youth category, defined as individuals aged 16 to 40,
resilience, they are actively influencing change across according to Nepal’s Youth Vision 2025 and the Constitution
sectors — from technology and entrepreneurship to of Nepal. This demographic actively utilizes various banking
education and social development. In an era defined by services, with 60% of youth customers holding savings
innovation and connectivity, young Nepalese are bridging accounts and 35% availing loan facilities. Additionally, a
tradition with modernity, driving digital transformation, significant number of young customers engage with the
and voicing bold ideas for a better tomorrow. Their energy, Bank’s digital services, with 72% subscribing to debit cards,
adaptability, and vision position them not just as participants, 63% to credit cards, and 66% to mobile banking services.
but also as powerful architects of Nepal’s future. These statistics highlight the Bank’s success in attracting
and serving the youth segment, aligning with its strategy to
Siddhartha Bank actively invests in youth development position itself as a digital-first, customer-centric institution.
through targeted financial products and strategic At Siddhartha Bank, youth are seen not merely as customers,
sponsorships. The bank offers the Siddhartha Gen-Z Saving but as collaborators, innovators, and catalysts for change.
Account, tailored to meet the dynamic needs of today’s
youth, providing benefits such as zero balance account The bank recognizes that today’s young generation brings
opening and ancillary freebies. Additionally, Siddhartha Bank fresh perspectives, digital fluency, and an entrepreneurial
sponsors School and College events, offering students a spirit that can drive meaningful transformation across the
platform to showcase their talents and creativity, thereby financial sector and beyond. By engaging youth through
fostering community engagement. In the sports sector, innovative platforms, sponsorships, and co-created financial
the Bank has demonstrated a strong commitment to solutions, Siddhartha Bank fosters a culture of collaboration
empowering Nepal’s youth by investing in cricket, a sport that where young voices are heard, valued, and empowered.
resonates deeply with young enthusiasts nationwide. The Whether it is supporting student-led events, investing in
bank extended its support to national cricket by sponsoring youth-driven sports ecosystems, or developing tech-enabled
the Prime Minister’s Cup National Cricket Tournament, further banking experiences tailored to their needs, the Bank
fostering youth engagement in sports. These initiatives positions young people as active partners in shaping a more
underscore Siddhartha Bank’s dedication to nurturing inclusive, agile, and forward-looking financial landscape.
youth potential and contributing to the nation’s social and This deep-rooted belief in youth as change-makers reflects
economic development through sports. Siddhartha Bank’s long-term vision of growing together with
the generation that holds the future in their hands.
Siddhartha Bank has effectively engaged Nepal’s youth
demographic by offering tailored banking products and
services.

FINANCIAL CUSTOMER
STRENGTH & RISK EXPERIENCE & BRAND
MANAGEMENT LOYALTY

BUSINESS
GROWTH & CUSTOMER
STRATEGIC DIVERSIFICATION
& BUSINESS
ACQUISITION
PLANS EXPANSION

WORKFORCE & TECHNOLOGY

ORGANIZATIONAL & DIGITAL
DEVELOPMENT EXCELLENCE

SUSTAINABILITY
& GREEN
BANKING

ANNUAL
70 REPORT 2023-24
SHORT-TERM PLANS  Increase market share among key customer segments.
 Strengthen the Bank’s capital base and prioritize a low-
capital-consuming portfolio. LONG-TERM PLANS
 Mobilize low-cost funds to support sustainable business  Establish a robust credit risk rating mechanism and
growth. advanced monitoring tools.

 Maintain a high-quality asset portfolio through proactive  Strengthen financial inclusion efforts to serve underserved
recovery measures. markets.

 Conduct year-round CASA and digital payment product  Position the Bank as the employer of choice among
campaigns. private commercial banks.

 Strengthen client relationships through continuous  Build state-of-the-art IT infrastructure to drive digital
engagement and personalized service. transformation.

 Streamline business processes to reduce turnaround time  Enhance the Bank’s digital presence through strong
and improve efficiency. branding across physical and online platforms.

 Enhance employee productivity through objective-based  Promote digital banking adoption to reduce dependency
training programs. on physical transactions.

 Foster a high-performance culture by recognizing and  Increase investments in green financing and sustainable
rewarding top talent. banking initiatives.

 Optimize workforce allocation by placing the right people  Work towards a net-zero carbon footprint by adopting
in key roles and implementing career planning for critical eco-friendly banking practices.
positions.  Invest in research and development to foster continuous
 Invest in local and international training programs to innovation in sustainable finance.
develop a sustainable, future-ready workforce.
RESOURCES ALLOCATION
MID-TERM PLANS
BUSINESS UNIT NO. OF EMPLOYEES
 Elevate customer satisfaction through continuous
feedback, service enhancements, and digital innovations. Business Head 3

 Shift focus from corporate banking to MSME and retail Audit Control 23
banking for diversified and sustained growth.
Bank Operations 150
 Selectively expand corporate banking while accelerating
Business 93
SME/retail expansion through multi-channel distribution.
Business Support 116
 Leverage AI-driven risk assessment and digital
documentation tools to enhance credit evaluation. Credit Regulation 14

 Deploy chatbot-based customer service solutions for General Service 10

seamless engagement.
Innovation and Outreach 12
 Diversify revenue streams by developing innovative
Risk and Compliance 49
financial products and services.
Sales Service 1,474
 Expand the customer base by refining and realigning
existing products to cater to evolving financial needs. Board Secretariat 4

 Foster an inclusive, high-performance organizational Technology Services 34

culture. Total 1,982

ANNUAL 71
REPORT 2023-24
 KEY PERFORMANCE INDICATORS (KPIS) TO MEASURE THE
ACHIEVEMENT AGAINST STRATEGIC OBJECTIVES

STRATEGIC
KPI ACHIEVEMENTS
OBJECTIVES
 New processes digitized  Digital Initiatives within the Organization Include:
during the year g
Siddhartha Automated Transaction System
 Digital products launched g
Loan Management System
during the year
g
Robotic Process Automation
 Investment made in
procurement of software g
Video Banking for Customer Verification

 Review of implementation g
Customer Relationship Management
DIGITAL FIRST status of Digital Strategy 2025
g
Online Banking Page
g
EasyBank
g
Banksmart Upgraded to BankSmart XP (Mobile Banking)
g
Human Capital Mangement System

 Digital Strategy Monitoring and Evaluation Committee in place to

review periodically.

 New products and services  Video Banking for Customer Verification, EasyBank for Account
launched during the year Opening, Ancilliary Service Request, Service Request through
BankSmart, Loan Request through BankSmart and EasyBank etc
 Loan portfolio segmentation
(Corporate/ MSME/ Retail)  Partnership with IFC/Swedfund/Finfund (External Commercial
Borrowing)
 New investments made
during the year (Treasury)  In FY 2080-81, the International Remittance Business Unit
successfully established partnerships with eight international
 Strategic partnerships
remittance providers, including Dar Exchange, Al Rostamani
entered during the year
DIVERSIFICATION Exchange, Al Jazira Exchange, Al Jarwan Exchange, Joy Alukkas
(Remittance related)
OF BUSINESS Exchange, City Exchange, Royale Growth and GCC Exchange.
 If any new corridors have
 20,000+ Payout Agents
been opened (Remittance
Business)  20,000+ Remittance Accounts

 The International Remittance Business Unit has introduced loan

services tailored for foreign workers.

 The unit has also initiated cross-selling strategies to enhance

service offerings.

 CSR expenses made during  2 EVs were added for bank operation purpose.
the year
 174 branches have solar backups.
 Certification of PCAF
 NPR 24 million were contributed in CSR.
regarding level 3 emissions
 NPR 32.04 million in solar financing projects.
 No. of branches powered by
solar power  Joined PCAF in attempt to measure and eventually reduce CO2
SUSTAINABILITY emissions from our investment portfolio
 Digitization of processes to
save paper  227 ATMs handling 7.42M paperless cash transactions

 Sustainable projects financed

by the Bank

 Addition of EVs in vehicle fleet

of the Bank

ANNUAL
72 REPORT 2023-24
  Dividend % of last year  Compared to previous fiscal year, share price has increased to
Rs. 283 from Rs. 253 in FY 2022-23.
 Average dividend given from
STAKEHOLDERS’ establishment  The Bank has shown a consistent effort to enhance stakeholder
PROSPERITY prosperity through dividend distributions and positive share price
 Positive movement in share
movements.
price
 4% cash dividend distribution to the shareholders.

 No. of pending grievances at  Number of grievances unresolved at year end is nil, which shows
year end focus on customer service Excellency.

 Any award received from  Certificate of Merit SAFA 2023

SERVICE ICAN, SAFA, VISA or other
EXCELLENCE  Best Presented Annual Report (Bronze) ICAN 2023
similar vendors
 Excellence in Prepaid Cards VISA 2023
 Appointment of separate
Customer Experience Officer  Excellence in Consumer Credit Cards Business VISA 2024

SWOT ANALYSIS

STRENGTHS OPPORTUNITIES
Digital Readiness 3 Increasing Tech-Savvy Population
Competent Human Resources 3 Rise of Digital Payments
Brand Value 3 Untapped Digital Economy
Efficient Utilization of Capital 3 Green Banking & Sustainable Finance
Good Governance 3 Cross-Border Trade & Remittances
Strong CSR Initiatives 3 Nepal’s Economic Growth & FDI Inflow
WIde Range of Products/Services 3 Integration of Marketplace
Diversified Loan Portfolio 3
Strategic Partnerships 3
Geographical Presence 3

WEAKNESSES THREATS
Slower Turn Around Time3 Volatile Market Conditions
High Operations Cost 3 Cybersecurity Risks
No International Presence 3 Digital Disruption from Fintech
Dependence on Traditional Banking 3 Unhealthy Competition
Global Economic Slowdowns
Political & Policy Instability
Rising Interest Rate Volatility
High Non-Performing Assets (NPA) Risk

ANNUAL 73
REPORT 2023-24
 PESTLE ANALYSIS

POLITICAL FACTORS SOCIAL FACTORS

 Political Stability: Nepal’s political  Financial Literacy: The level of
environment has seen periods financial awareness among the
of instability, which can affect population influences the adoption
investor confidence and economic of banking services. Efforts to
growth, subsequently impacting enhance financial literacy can
banking operations. A stable expand the Bank’s customer base.
political environment supports
banking efficiency, while instability  Access to Credit: Small businesses
possess several risks for banks. ECONOMIC FACTORS and farmers still rely on traditional,
 Economic Growth: Nepal’s unsystematic loan methods,
 Government Policies: Regulatory economic performance directly highlighting the need for formal
frameworks and policies set affects banking activities. banking solutions.
by Central Bank influences the Economic downturns can lead
Bank’s operations, including to increased loan defaults, while  Evolving Customer Expectations:
capital requirements, lending growth periods may boost lending A youthful population presents
practices, operations, governance and investment opportunities.. opportunities for digital banking
mechanism. services, as younger individuals
 Inflation Rates: Fluctuations in are more inclined to adopt new
 Impact on Banking Operations: inflation impact interest rates, technologies. The Bank must adapt
Overall, political factors are crucial affecting both depositors and to rapidly changing customer
in shaping the Banking industry, borrowers. High inflation affects needs and preferences to stay
and the Bank must stay alert to borrowing costs, investment competitive.
political changes. returns, and can lead to increased
loan defaults and non-performing  Cultural Sensitivity:
loans. Understanding local cultures
is essential for developing and
 Weak Economic Structure: Nepal’s marketing relevant banking
low GDP, inflation, trade deficit, products and services.
and low foreign currency reserves
create economic challenges.

 Interest Rates: Interest rates

significantly influence loan
demand and deposit growth in
banks.

 Diversified Economy: Nepal’s

expanding economy, with a
growing private sector, presents
opportunities for the Bank’s growth.

 Banking Role in Private Sector

Financing: The Bank play a key role
in supporting and financing the
private sector’s development.

ANNUAL
74 REPORT 2023-24
 LEGAL FACTORS
 Regulatory Compliance:
Adherence to laws and regulations
set by the NRB and other governing
bodies is mandatory, influencing
the Bank’s operational procedures
and compliance costs.

 Customer Rights & Data Privacy:

TECHNOLOGICAL FACTORS Ensuring the protection of ENVIRONMENTAL FACTORS
 Digital Transformation: customer data and privacy is a key  Sustainable Banking Practices:
Advancements in technology legal obligation. There is a growing emphasis on
necessitate continuous investment environmental sustainability. The
in digital banking platforms to  Anti-Money Laundering (AML) Bank may need to adopt green
meet customer expectations and Laws: Strict enforcement of banking initiatives to align with
stay competitive. AML regulations requires SBL global trends and regulatory
to implement comprehensive expectations.
 Cybersecurity: As digital banking monitoring and reporting systems.
grows, so does the importance of  Climate Change Risks:
robust cybersecurity measures  Taxation & Labor Laws: Environmental changes can
to protect customer data and Compliance with national tax impact economic stability,
maintain trust. regulations and labor laws is affecting sectors like agriculture,
essential for smooth operations which in turn influences the Bank’s
 Customer-Centric Approach: and legal integrity. loan portfolios. Rising climate-
Modern banking emphasizes related challenges, including
personalized services through natural disasters, can impact
internet banking, ATMs, universal economic stability and increase
banking and system automation financial risks for banks.

 Operational Efficiency: Investing  Risk Management & Contingency

in digital infrastructure enhances Planning: The Bank must assess
productivity, reduces the Bank’s vulnerabilities and develop robust
costs and improves customer contingency plans, especially
service. during crises like pandemics.

 Sustainable Banking: Investing

in eco-friendly projects, energy-
efficient solutions, and waste
management initiatives is
becoming essential for the Bank.

 Green Finance Initiatives:

Encouraging sustainable
development through responsible
lending and investment practices
aligns with global financial trends.

ANNUAL 75
REPORT 2023-24
 VALUE ADDED STATEMENT
Value Added Statement (VAS) is a financial disclosure that highlights the value created by a bank during a specific period
and how this value is distributed among stakeholders, such as employees, shareholders, the government, and the Bank itself
(retained earnings). It is a supplementary report that provides insight into the Bank›s contribution to the economy and its role
in wealth creations.

The below figure illustrate the value utilization of current year:

To Employees (Personnel
18% expenses)
To Government (Corporate Tax)
To Shareholders
37%
Retained by the Bank
(Including Depreciation)
7.09%

37.91%

VALUE ADDED STATEMENT AND ITS DISTRIBUTION

In NPR

PARTICULARS 2022-23 2023-24

Value Added

Net Interest Income 8,173,574,969 7,930,069,971

Net Fee and Commission Income 1,345,620,915 1,426,334,469

Net Trading Income 202,703,890 239,844,593

Other Income 349,800,090 392,317,048

Less: Operating Expenses

(917,442,986) (985,628,185)
(Other than Personnel Expenses, Depreciation and Amortization)

Less: Impairment Charges (1,187,561,177) (1,051,123,141)

Total Value Added 7,966,695,701 7,951,814,756

Distributions

To Employees (Personnel Expenses) 2,852,235,828 2,977,901,219

To Government (Corporate Tax) 1,398,487,648 1,395,737,277

To Shareholders 593,188,166 563,599,208

Retained by the Bank (Including Depreciation) 3,122,784,059 3,014,577,053

Total Distribution 7,966,695,701 7,951,814,756

ANNUAL
76 REPORT 2023-24
ECONOMIC VALUE ADDED STATEMENT
An Economic Value Added (EVA) Statement assesses the Bank’s true economic profit by deducting the cost of capital from
its net operating profit after taxes (NOPAT). This metric determines whether a company is creating value beyond the required
return on its invested capital.

Unlike traditional accounting profits, which often overlook the cost of capital, EVA provides a clearer view of economic
performance by focusing on value creation for shareholders. It aligns financial outcomes with shareholder interests, making it
a useful measure for evaluating how effectively a company utilizes its resources to generate returns.

In NPR
PARTICULARS 2022-23 2023-24
Net operating profit 4,652,981,749 4,484,499,312

Provision for tax 1,398,487,648 1,395,737,277

Net Operating Profit after Tax (A) 3,254,494,101 3,088,762,035

Paid up capital 14,089,980,190 14,089,980,190

Cost of Capital (%)* 13.50% 15.98%

Capital charge (B) 1,901,962,788 2,251,231,625

Economic value added (A-B) 1,352,531,314 837,530,411

*Cost of capital has been calculated on the basis of Capital Asset Pricing Model.

ANNUAL 77
REPORT 2023-24
 FAIR VALUE HIERARCHY
Fair value is a measure of to classify the inputs used in valuing financial instruments at fair value. It is designed to provide
transparency and consistency in how fair value measurements are determined and disclosed. The fair value hierarchy consists
of three levels, based on the reliability and observability of the inputs used in the valuation process.

The fair value hierarchy prioritizes the use of observable inputs (Level 1 and Level 2) and minimizes the use of unobservable
inputs (Level 3) to ensure consistency and transparency in fair value measurements

FAIR VALUE AS ON 16 JULY 2023 AS ON 15 JULY 2024

PARTICULARS HIERARCHY
LEVEL CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE

Financial Assets

FVTPL

Derivative Financial Instruments 1 17,320,155 17,320,155 4,976,896 4,976,896

Sub Total 17,320,155 17,320,155 4,976,896 4,976,896

FVTOCI

Quoted Equities 1 4,642,181,363 4,642,181,363 5,282,222,268 5,282,222,268

Unquoted Equities 3 1,530,979,155 1,530,979,155 1,624,233,393 1,624,233,393

Sub Total 6,173,160,518 6,173,160,518 6,906,455,661 6,906,455,661

Amortized Cost

Cash and Cash Equivalent 3 11,554,080,479 11,554,080,479 22,739,728,891 22,739,728,891

Due from Nepal Rastra Bank 3 8,879,504,444 8,879,504,444 9,453,753,577 9,453,753,577

Placements with Bank and Financial
3 5,011,346,934 5,011,346,934 6,562,120,179 6,562,120,179
Institutions
Loan and Advances to BFIs 3 5,170,773,907 5,170,773,907 5,767,824,492 5,767,824,492

Loans and Advances to Customers 3 183,982,742,234 183,982,742,234 195,473,382,509 195,473,382,509

Investment Securities (Except Equity

3 56,307,315,516 56,307,315,516 41,072,503,751 41,072,503,751
Instruments)

Sub Total 270,905,763,513 270,905,763,513 281,069,313,400 281,069,313,400

Total Of Financial Assets 277,096,244,186 277,096,244,186 287,980,745,956 287,980,745,956

FVTPL

Derivative Financial Instruments 1 23,887,253 23,887,253 3,984,885 3,984,885

Sub Total 23,887,253 23,887,253 3,984,885 3,984,885

Financial Liabilities

FVTPL/FVTOCI

Liability for Employees Defined

3 293,508,627 293,508,627 264,198,600 264,198,600
Benefit Obligations

Sub Total 293,508,627 293,508,627 264,198,600 264,198,600

Amortized Cost
Due to Bank and Financial
3 11,613,657,572 11,613,657,572 3,578,162,810 3,578,162,810
Institutions
Due to Nepal Rastra Bank 3 288,453,474 288,453,474 391,922,787 391,922,787

Deposits from Customers 3 223,654,669,691 223,654,669,691 241,329,082,024 241,329,082,024

Borrowing 3 7,312,480,160 7,312,480,160 5,964,375,769 5,964,375,769

Other Liabilities 3 5,293,350,483 5,293,350,483 5,408,198,880 5,408,198,880

Debt Securities Issued 3 11,662,559,000 11,662,559,000 11,662,559,000 11,662,559,000

Sub Total 259,825,170,380 259,851,999,187 268,334,301,271 268,334,301,271

Total Of Financial Liabilities 260,142,566,261 260,142,566,261 268,602,484,755 268,602,484,755

ANNUAL
78 REPORT 2023-24
 MATURITY PATTERN OF ASSETS AND LIABILITIES
The maturity pattern of assets and liabilities reflects the timing of cash flows associated with the Banks financial resources and obligations. It has categorized assets and liabilities into short-term
(upto one year), medium-term (upto five years), and long-term more than five years) buckets.
NPR in Million
MORE
PARTICULARS 181-270 271-365
1-7 DAYS 8-30 DAYS 31-90 DAYS 91-180 DAYS 1-2 YEARS 2-5 YEARS THAN 5 TOTAL
DAYS DAYS
YEARS
Assets

Cash Balance 3,553.66 - - - - - - - - 3,553.66

Balance with NRB 9,453.75 - - - - - - - - 9,453.75

Balance with Domestic BFIS

Current Account 538.20 - - - - - - - - 538.20

Money at Call, Interbank Lending, Placement, etc. 1,000.00 - - - - - - - - 1,000.00

Balance with Foreign BFIS

Current Account 1,867.87 - - - - - - - - 1,867.87

Money at Call, Placement, etc. 3,403.54 767.73 708.88 4,112.81 - - 936.25 - - 9,929.21

Investments

Government Securities - - 98.43 50.00 2,674.84 3,235.98 6,791.98 20,130.60 6,191.95 39,173.77

Nepal Rastra Bank Instruments - - - - - - - - - -

Corporate Securities 5,911.26 - - 97.07 43.61 - 52.82 1,072.82 1,196.40 8,373.98

Others 12,300.00 - - - - - - - - 12,300.00

Loans & Advances 6,096.82 5,582.18 19,283.24 13,085.38 9,000.87 8,754.77 17,731.01 41,729.59 82,274.17 203,538.03

Interest Receivable - - 2,429.48 - - - - - - 2,429.48

Others 35.92 1,382.25 121.98 135.88 137.51 342.62 1,685.92 1,417.72 5,944.74 11,204.55

Total Assets 44,161.02 7,732.16 22,642.01 17,481.14 11,856.83 12,333.37 27,197.98 64,350.73 95,607.26 303,362.50

Liabilities

Deposits

Current Deposits 2,433.67 1,622.45 1,216.84 811.22 811.22 1,216.84 2,294.48 1,289.55 1,289.55 12,985.82

Saving Deposits 5,314.81 5,314.81 3,543.21 3,543.21 7,086.41 10,629.62 19,154.52 11,379.55 11,379.55 77,345.67

Call Deposits 2,090.71 2,090.71 2,090.71 2,090.71 2,787.61 2,787.61 3,097.97 3,097.04 3,097.04 23,230.11

Fixed Deposits 2,724.82 7,806.17 22,488.32 31,320.27 20,706.33 13,479.04 9,559.49 12,830.76 9,012.19 129,927.40

Other Deposits - - - - - 1,418.25 - - - 1,418.25

REPORT 2023-24
79 ANNUAL
 80
ANNUAL
REPORT 2023-24
MORE
PARTICULARS 181-270 271-365
1-7 DAYS 8-30 DAYS 31-90 DAYS 91-180 DAYS 1-2 YEARS 2-5 YEARS THAN 5 TOTAL
DAYS DAYS
YEARS
Borrowings

Call/Short Notice - - - - - - - - - -

Inter-Bank/Financial Institutions - - - - - - - - - -

Refinance - - - - - - - - 391.92 391.92

Repo - - - - - - - - - -

Debentures/Bonds - - - - - - 2,162.56 5,500.00 4,000.00 11,662.56

Others - - - 1,471.25 - - 4,493.13 - - 5,964.38

Other Liabilities and Provisions

Sundry Creditors - 875.53 - - - - - - - 875.53

Bills Payable - 31.30 - - - - - - - 31.30

Interest Payable 526.92 2.16 - - - - - - - 529.08

Provisions - - - 497.31 - - - - - 497.31

Others 1.18 1.11 1,167.79 0.89 - 911.30 469.02 721.42 1,140.12 4,412.81

Total Liabilities 13,092.11 17,744.24 30,506.87 39,734.86 31,391.57 30,442.66 41,231.17 34,818.32 30,310.37 269,272.14

Net Assets and Liabilities 31,068.91 (10,012.08) (7,864.86) (22,253.72) (19,534.74) (18,109.29) (14,033.19) 29,532.41 65,296.89 34,090.36

Cumulative Gap - 21,056.84 13,191.99 (9,061.73) (28,596.47) (46,705.74) (60,738.93) (31,206.52) 34,090.37 -
LOAN CLASSIFICATION AND NPA DISCLOSURE
The Bank is proactively managing its Non-Performing Assets by prioritizing recoveries and strengthening provisioning
measures. The rise in loss loans has been a significant concern to the Bank due to the prevailing economic uncertainties.
Despite this, the Bank is committed to maintaining healthy loan portfolio through effective recovery strategies and stringent
risk management practices.

MOVEMENT IN NPA

NPR in Million

% INCREMENT OR
PARTICULARS 2023-24 2022-23
DECREMENT

Restructured/Rescheduled Loans - 2.14 -100.00%

Substandard Loans 1,352.51 1,143.88 18.24%

Doubtful Loans 793.82 1,821.76 -56.43%

Loss Loans 2,271.54 864.02 162.90%

Total Non-Performing Loans 4,417.87 3,831.80 15.29%

MOVEMENT IN PROVISION OF NON-PERFORMING LOANS

NPR in Million

% INCREMENT OR
PARTICULARS 2023-24 2022-23
DECREMENT

Restructured/Rescheduled Loans - 0.27 -100.00%

Substandard Loans 328.99 280.81 17.16%

Doubtful Loans 381.56 900.90 -57.65%

Loss Loans 2,224.35 815.07 172.90%

Total Provision of Non-Performing Loans 2,934.90 1,997.05 46.96%

LOANS CLASSIFICATION WITH PROVISIONING

FY 2023-24 NPR In Million
CLASSIFICATION INSURED OTHER TOTAL AMOUNT ACTUAL PROV.

Pass (1.20%) 3,447.58 178,579.65 182,027.23 2,229.11

Watch List (5%) 195.87 16,897.07 17,092.94 857.07

Rescheduled / Restructured (12.5%) - - - -

Substandard (25%) 49.18 1,303.33 1,352.51 328.99

Doubtful (50%) 41.45 752.37 793.82 381.56

Loss (100%) 62.92 2,208.62 2,271.54 2,224.35

Total Loan 3,797.00 199,741.04 203,538.04 6,021.08

Total Non-Performing Loan (NPL) 4,417.87 2,934.90

FY 2022-23 NPR In Million

CLASSIFICATION INSURED OTHER TOTAL AMOUNT ACTUAL PROV.
Pass (1.30%) 3,681.94 171,029.59 174,711.53 2,356.82

Watch List (5%) 259.06 12,072.29 12,331.34 616.08

Rescheduled / Restructured (12.5%) - 2.14 2.14 0.27

Substandard (25%) 35.13 1,108.75 1,143.88 280.81

Doubtful (50%) 29.97 1,791.79 1,821.76 900.90

Loss (100%) 34.64 829.38 864.02 815.07

Total Loan 4,040.73 186,833.93 190,874.67 4,969.95

Total Non-Performing Loan (NPL) 3,831.80 1,997.05

ANNUAL 81
REPORT 2023-24
 DETAILS OF ACCOUNTS RESTRUCTURED AS PER REGULATORY GUIDELINES
Nepal Rastra Bank Directive on loan restructuring of loan and advances has provided the framework for restructuring of
problematic loan to provide the relief to the borrower with specified terms and conditions.

As on Mid July 2024, the Bank has restructured the following accounts of the borrower with the details as mentioned under:

NPR in Million
RESTRUCTURED SECTOR NO. OF ACCOUNTS OUTSTANDING AMOUNT

Agricultural and Forest Related 210 1,707

Agriculture, Forestry & Beverage Production Related 68 648

Construction 73 491

Consumption Loans 133 414

Finance, Insurance and Real Estate 21 186

Fishery Related 13 160

Hotel or Restaurant 72 2,292

Metal Products, Machinery & Electronic Equipment &

9 45
Assemblage

Mining Related 10 261

Non-Food Production Related 172 2,231

Other Services 40 465

Others 104 434

Power, Gas and Water 2 36

Transport, Communication and Public Utilities 52 176

Wholesaler & Retailer 460 4,347

Grand Total 1,439 13,896

ANNUAL
82 REPORT 2023-24
DETAILS OF CREDIT CONCENTRATION / SECTOR WISE EXPOSURES
SECTOR WISE BREAKDOWN OF TOTAL LOAN
PERCENTAGE
2022-23 2023-24
PARTICULARS INCREMENT/
NPR IN MILLION NPR IN MILLION
(DECREMENT)
Agriculture 17,095 15,644 -8.49%
Fishery 677 816 20.42%
Mining 627 621 -0.92%

Agriculture, Forestry & Beverage

7,029 8,976 27.71%
Production Related

Non-food Production Related 22,488 22,478 -0.04%

Construction 5,325 5,300 -0.48%
Electricity,Gas and Water 13,195 16,174 22.58%
Metal Production, Machinery and Electrical Tools 2,539 2,457 -3.20%
Transportation, Communications and Public Services 3,952 4,077 3.18%
Wholesaler and Retailer 45,675 47,643 4.31%
Finance, Insurance and Real Estate 11,462 12,740 11.15%
Hotel or Restaurant 7,470 7,675 2.74%
Other Service Industries 7,943 8,490 6.87%
Consumable Loan 32,456 38,900 19.85%
Local Government 151 151 0.00%
Others 12,790 11,396 -10.90%

SECTORAL NPA
NPR in Million

PERCENTAGE
SECTOR 2022-23 2023-24
INCREMENT/(DECREMENT)

Agriculture 510.69 656.56 28.56%

Fishery 10.01 24.56 145.25%

Mining 62.74 26.57 -57.66%

Agriculture, Forestry & Beverage Production Related 242.88 256.90 5.77%

Non-food Production Related 351.05 533.29 51.91%

Construction 127.78 166.82 30.56%

Electricity,Gas and Water 54.64 223.92 309.78%

Metal Production, Machinery and Electrical Tools 12.08 51.86 329.29%

Transportation, Communications and Public Services 105.07 93.03 -11.45%

Wholesaler and Retailer 1,568.62 2,120.29 35.17%

Finance, Insurance and Real Estate 130.61 224.47 0.00%

Hotel or Restaurant 13.14 270.77 1960.46%

Other Service Industries 74.67 141.81 89.92%

Consumable Loan 380.06 893.53 135.10%

Local Government 0.14 1.95 0.00%

Others 187.62 334.75 78.42%

The Bank, like the entire banking sector, has faced significant challenges due to the ongoing economic sluggishness,
which has severely impacted borrowers’ repayment capacities. As a result, delinquency ratios across banks and financial
institutions have been rising and are expected to increase further. Despite the Bank’s diligent efforts to recover Non-
Performing Assets (NPA) and overdue amounts, the anticipated outcomes have not materialized as expected.

ANNUAL 83
REPORT 2023-24
 COMPLIANCE WITH THE PRIORITY SECTOR LENDING NORMS
Nepal Rastra Bank (NRB) has established specific priority sector lending norms for Banks and Financial Institutions (BFIs) in
Nepal to promote economic development and financial inclusion. This requires Commercial Bank to allocate at certain
percentage of its total loans and advances to Priority Sectors; Agriculture Sector, Hydroelectricity Sector, Tourism Sectors and
Other Priority Sectors such as loan upto NPR 200 million to Micro Industries, Small Industries, Medium and Cottage Industries
including Deprived Sector Loan. This aims to channel financial resources into sectors that are crucial for the country’s
economic growth and development.

NPR in Million
PRIORITY SECTOR LENDING- MID JULY 2024

STATUTORY
REQUIREMENT 6.5% ACTUAL NPR
17,170 8.64%
Agriculture
Micro, Cottage, Small and
Medium Industries
Hydropower/ Energy

STATUTORY
REQUIREMENT 11%

ACTUAL NPR
ACTUAL NPR
15,000 7.55%
25,489 12.83%

STATUTORY
REQUIREMENT 11%

28.5%
Total Statutory
29.02%
Total Actual
Requirement Lending

 If any bank has complied with the minimum lending requirement in agricultural sector, but are unable to invest accordingly
to the minimum requirement in other sectors, then banks can calculate total percentage by investing in their specialized
priority sector to fulfill the deficit.

ANNUAL
84 REPORT 2023-24
DETAILS OF NON-STATUTORY INVESTMENT PORTFOLIO
Amount in NPR
GROUP BANK
PARTICULARS
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Debt Securities 1,459,077,598 1,459,077,598 1,451,101,598 1,451,101,598

Other 76,000,000 128,500,000 - -

Less: Specific Allowances for Impairment - - - -

Equity Instruments 7,013,206,218 6,285,075,676 6,906,455,661 6,173,160,518

Quoted Equity Securities 5,338,972,825 4,758,486,521 5,282,222,268 4,696,571,363

Unquoted Equity Securities 1,674,233,393 1,526,589,155 1,624,233,393 1,476,589,155

Total 8,548,283,816 7,872,653,274 8,357,557,259 7,624,262,116

The Bank has invested NPR 1.45 billion in agri and energy bonds issued by BFIs, which has remained unchanged since the last
fiscal year. The Bank’s equity investment portfolio has increased from NPR 6.17 billion to NPR 6.91 billion on account of increased
equity investment and rise in NEPSE.

DISCLOSURES FOR DERIVATIVE INVESTMENTS

ASSETS Amount in NPR

GROUP BANK
PARTICULARS
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Held for Trading

Interest Rate Swap - - - -

Currency Swap - - - -

Forward Exchange Contract 4,976,896 17,320,155 4,976,896 17,320,155

Others - - - -

Held for Risk Management

Interest Rate Swap - - - -

Currency Swap - - - -

Forward Exchange Contract - - - -

Other - - - -

Total 4,976,896 17,320,155 4,976,896 17,320,155

LIABILITIES

GROUP BANK
PARTICULARS
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Held for trading

Interest Rate Swap - - - -

Currency Swap - - - -

Forward Exchange Contract 3,984,885 23,887,253 3,984,885 23,887,253

Others - - - -

Held for Risk Management

Interest Rate Swap - - - -

Currency Swap - - - -

Forward Exchange Contract - - - -

Other - - - -

Total 3,984,885 23,887,253 3,984,885 23,887,253

ANNUAL 85
REPORT 2023-24
 DISCLOSURE OF SALE/ TRANSFER OF SECURITIES TO/
FROM HTM (HELD TO MATURITY CATEGORY)

PARTICULARS AMOUNT (NPR)

Matured HTM Investment

Treasury Bills 21,955,825,000

Government Bonds 3,361,450,000

Local Bonds -

Sub-Total 25,317,275,000

Sold HTM Investment

Treasury Bills -

Government Bonds -

Local Bonds -

Sub-Total -

Total 25,317,275,000

Treasury Bills of NPR 21.96 billion and Government Bonds of NPR 3.36 billion have matured in FY 2023-24, which has been
disposed from Held to Maturity portfolio of the Bank.

MARKET SHARE INFORMATION

PARTICULARS 2019-20 2020-21 2021-22 2022-23 2023-24

Deposit

Total Deposit of Banking Industry (NPR in Million) 3,933,738 4,740,066 5,159,175 5,771,238 6,495,583

Total Deposit of SBL (NPR in Million) 145,948 185,197 196,484 228,568 244,907

Market Share of SBL% 3.71% 3.91% 3.81% 3.96% 3.77%

Industry Growth Rate 17.27% 20.50% 8.84% 11.86% 12.55%

SBL Growth Rate 19.11% 26.89% 6.09% 16.33% 7.15%

Loan

Total Lending of Banking Industry (NPR in Million) 3,273,096 4,174,616 4,713,537 4,877,407 5,168,664

Total Lending of SBL (NPR in Million) 127,496 165,646 186,091 190,875 203,540

Market Share of SBL% 3.90% 3.97% 3.95% 3.91% 3.94%

Industry Growth Rate 12.32% 27.54% 12.91% 3.48% 5.97%

SBL Growth Rate 17.39% 29.92% 12.34% 2.57% 6.64%

Total Business

Total Business of Banking Industry (NPR in Million) 7,206,834 8,914,682 9,872,712 10,648,645 11,664,247

Total Business of Sbl (NPR in Million) 273,444 350,843 382,575 419,443 448,447

Market Share of SBL% 3.79% 3.94% 3.88% 3.94% 3.84%

Industry Growth Rate 14.97% 23.70% 10.75% 7.86% 9.54%

SBL Growth Rate 18.30% 28.31% 9.04% 9.64% 6.91%

Total Debit Cards

Total Debit Cards of Banking Industry 7,329,202 8,839,855 10,856,357 12,245,485 12,893,528

Total Debit Cards of SBL 344,375 430,613 545,087 685,560 807,032

Market Share of SBL% 4.70% 4.87% 5.02% 5.60% 6.26%

Industry Growth Rate 9.25% 20.61% 22.81% 12.80% 5.29%

SBL Growth Rate 27.02% 25.04% 26.58% 25.77% 17.72%

ANNUAL
86 REPORT 2023-24
PARTICULARS 2019-20 2020-21 2021-22 2022-23 2023-24

Total Credit Cards

Total Credit Cards of Banking Industry 160,297 192,370 238,794 283,772 289,239

Total Credit Cards of SBL 23,813 27,215 30,600 38,848 50,176

Market Share of SBL% 14.86% 14.15% 12.81% 13.69% 17.35%

Industry Growth Rate 30.17% 20.01% 24.13% 18.84% 1.93%

SBL Growth Rate 38.39% 14.29% 12.44% 26.95% 29.16%

Total Mobile Banking and Internet Banking Users

Total Mobile Banking and Internet Banking Users of

12,338,024 15,355,160 19,991,565 23,220,184 24,648,846
Banking Industry

Total Mobile Banking and Internet Banking Users

385,654 529,038 723,873 832,222 1,006,766
of SBL

Market Share of SBL% 3.13% 3.45% 3.62% 3.58% 4.08%

Industry Growth Rate 33.17% 24.45% 30.19% 16.15% 6.15%

SBL Growth Rate 35.93% 37.18% 36.83% 14.97% 20.97%

MARKET VALUE PER SHARE

MARKET CAPITALIZATION
FISCAL YEAR MARKET VALUE PER SHARE (NPR)
NPR IN MILLION

2019-20 296 28,971.79

2020-21 504 55,249.99

2021-22 303 37,949.01

2022-23 253 35,647.64

2023-24 283 39,874.64

SHARE TRADING INFORMATION

NO. OF SHARES TRADED

FISCAL YEAR MAXIMUM PRICE (NPR) CLOSING PRICE (NPR)
DURING THE YEAR

2019-20 393 296 5,214,991

2020-21 533 504 31,907,856

2021-22 605 303 23,844,865

2022-23 348 253 8,318,720

2023-24 290 283 10,223,413

ANNUAL 87
REPORT 2023-24
 DIGITAL FOOTPRINT
DEBIT CARD
FISCAL YEAR DEBIT CARD CUSTOMER
2020-21 430,613

2021-22 545,087

2022-23 685,560

2023-24 807,032

CREDIT CARD
FISCAL YEAR CREDIT CARD CUSTOMER
2020-21 27,215

2021-22 30,600

2022-23 38,848

2023-24 50,176

PREPAID CARD
FISCAL YEAR PREPAID CARD CUSTOMER
2020-21 6,553

2021-22 11,343

2022-23 16,842

2023-24 25,228

MOBILE BANKING (BANKSMART)

FISCAL YEAR MOBILE BANKING CUSTOMER (BANKSMART)

2020-21 468,139

2021-22 656,401

2022-23 832,222

2023-24 1,006,766

POS DEPLOYMENT
FISCAL YEAR POS DEPLOYMENT
2020-21 1,696

2021-22 1,760

2022-23 2,230

2023-24 2,851

ATM NETWORKS
FISCAL YEAR ATM NETWORKS

2020-21 208

2021-22 212

2022-23 225

2023-24 227

ANNUAL
88 REPORT 2023-24
QR ENROLLMENT
FISCAL YEAR QR ENROLLMENT
2020-21 5,068

2021-22 19,071

2022-23 42,766

2023-24 41,759

NEW CUSTOMER ENROLLMENT DURING CURRENT FISCAL YEAR

DIGITAL PRODUCTS NEW CUSTOMER ENROLLMENT

BankSmart 174,544

Debit Card 121,472

Credit Card 11,328

Prepaid Card 8,386

POS 1,119

QR 7,652

WOMEN ACCESS IN DIGITAL CHANNEL TILL FISCAL YEAR 2023-24

DIGITAL PRODUCTS NO OF CUSTOMER
BankSmart 337,330

Debit Card 104,178

Credit Card 9,220

Prepaid Card 8,981

BANK WEBSITE AND SOCIAL MEDIA

The Bank’s website experienced significant interest and interaction as per Google Analytics 4 (GA4).

PLATFORM 2023-24

Page Views 4,810,408

User 1,218,252

New User 1,152,037

Social media platforms have become essential tools for communication, marketing, brand building and networking. To
connect with the younger generation (Gen Z), the Bank launched targeted campaigns across platforms like Facebook,
Instagram, X , LinkedIn, YouTube and Viber. These initiatives led to significant growth in followers and enhanced the Bank’s
digital presence. This strengthened social media engagement has played a key role in attracting new customers and
improving the Bank’s ranking among commercial banks on Facebook.

ANNUAL 89
REPORT 2023-24
 MID JULY 2023 MID JULY 2024
PLATFORM (LIKES/FOLLOWERS/ RANK (LIKES/FOLLOWERS/ RANK GROWTH %
SUBSCRIBERS) SUBSCRIBERS)

Facebook 345,000 4th 394,610 4th 14.38%

Instagram 12,300 4th 14,514 4th 18%

X 2,701 3rd 2,734 3rd 1.22%

LinkedIn 6,019 4th 6,554 6th 8.89%

TikTok 2,038 5th - - -

Youtube 3,800 8th 5,290 7th 39.21%

Viber 16,886 5th 14,831 3rd -12.6%

In the FY 2023-24 Facebook remains 4th, with a 14.38% growth to 394,610 followers. Instagram grew by 18%, maintaining 4th place,
while X saw minimal growth (1.22%) and stayed 3rd. LinkedIn gained 8.89% followers but dropped to 6th place, showing steady
growth and potential for further engagement despite increased competition, while YouTube followers increased organically
to 39.21%, rising from 8th to 7th place. TikTok was banned in Nepal during the FY 2023-24 limiting the ability to measure its user
engagement and growth during this period. Viber experienced a -12.6% decline in followers but moved up to 3rd rank, reflecting
shifting platform preferences among users.

CASH DEPOSIT AND CHEQUE DEPOSIT MACHINE TILL FISCAL YEAR 2023-24
MACHINE NUMBER
Cash Deposit Machine 3

Cheque Deposit Machine 3

TOTAL DIGITAL TRANSACTION NUMBER AND AMOUNT THROUGH DIGITAL CHANNEL

PRODUCT TOTAL TRANSACTION IN NUMBER

Debit Card including medical card 8,922,425

Credit Card 460,858

Prepaid Card- Travel Card 118,555

Banksmart 30,389,757

POS 580,112

ATM 7,422,933

QR 8,927,278

IPS Inward 1,198,788

IPS Outward 62,714

Smart Teller 113,887

RTGS Inward 29,867

RTGS Outward 21,123

Cash Deposit Machine 16,495

Cheque Deposit Machine 13,950

ANNUAL
90 REPORT 2023-24
DIGITAL SERVICE THROUGH CONTACT CENTER

Through Contact Center (Multiple Channel)

CONTACT CENTER SERVICE TOTAL SERVICE

Total Cases Registered Contact Center 131,868

Service Request 78,455

Enquiries 53,273

Complaints 99

Feedback & Suggestions 41

Service Delivery Completed 120,475

Service Cancel or Updated to New Status 11,393

Through Video Banking

VIDEO BANKING STARTED THE SERVICE FROM SEPTEMBER 2023 TOTAL ONBOARDING

Account Onboarding 1,150

Demat Onboarding 442

Customer Suggestion/Feedback Reported through Contact Center:

PARTICULARS NUMBER

No. of feedback /suggestion received from customers 41

No. of incident reported by customer 99

DIGITAL SERVICES THROUGH DIFFERENT EASYBANK/BANKSMART/WEBSITE/VIDEO BANKING PLATFORM

DIGITIZATION CHANNEL BROAD AREA DETAIL LIST OF ACTIVITIES COUNT OF SERVICES

BankSmart XP Operation Smart Teller 26,357

BankSmart XP Operation Card Less Withdrawal 89,019

BankSmart XP Operation FD Opening 39,353

EasyBank BankSmart XP Loan Loan Against FD 6,686

EasyBank BankSmart XP Loan Loan to QR Merchants 837

EasyBank BankSmart XP Operation Cheque Stop Payment 45

EasyBank BankSmart XP Operation Customer KYC Update 1,822

EasyBank Website Loan Online Credit Card 196

EasyBank Website Card Business Online Debit Card New 651

EasyBank Website Card Business Online Debit Card Renewal 3,224

EasyBank Website Card Business Online Debit Card Replacement 3,224

EasyBank Website Deposit Online Demat 1,010

EasyBank Website Deposit Online Fixed Deposit 196

EasyBank Website Operation CRN View 5,090

EasyBank Website Operation PAN Update 272

Video Banking Deposit Account Opening 3,245

Video Banking Deposit Demat account Opening 990

Video Banking Business PG collection 3,767

Bank Website Operation Bank Guarantee Check 2,641

Miscellaneous Operation IPO/FPO Alert 8

ANNUAL 91
REPORT 2023-24
 ANNUAL
92 REPORT 2023-24
SUSTAINABILITY
REPORT

ANNUAL 93
REPORT 2023-24
 SIDDHARTHA BANK - SUSTAINABILITY AT A GLANCE

DRIVING GREEN DIGITAL & EMPOWERING COMMITMENT CONTRIBUTION

FINANCE & FINANCIAL COMMUNITIES & TO SOCIAL & TO NATIONAL
SUSTAINABILITY INCLUSION ECONOMIC GROWTH HUMAN CAPITAL ECONOMY
DEVELOPMENT
 NPR 17,170.63M  1.06M Mobile  NPR 17,214.71M in  NPR 3.35 Billion
in Renewable Banking Users Retall Loans to  NPR 24M Invested paid in taxes to
Energy Financing with 30.39M Women (8.45% of in CSR Initiatives the Government
Transactions loan exposure)
 NPR 3,389.66M  NPR 10M for  4% Dividend
in EV Financing  227 ATMs  NPR 25,489M Kathmandu Distribution
(1.67% of loan handling 7.42M In Agriculture Institute of Child
 Siddhartha Bank
exposure) Paperless Cash Financing (12.83% Health
is committed to
Transactions of loan exposure)
 NPR 32.04M in  255 Women a sustainable,
Solar Financing  73 Agent Outlets  NPR 14,999.55M Entrepreneurs Inclusive, and
providing banking In SME Financing Trained in digital-first
 174 Branches with
access in rural (7.55% of loan Financial Uteracy banking future!
Solar Backup &
areas exposure)
Hydro Power  311 Training
 1,150 Accounts  NPR 4,755M in Programs for
 2 EVs procured for
& 442 Demat Subsidy Financing 6,473 Participants
bank operations
Opened via Video (2.33% of loan
 146 Employees
Banking exposure)
Promoted & 21
 181,749 Digital Recognized for
Service Requests 15+ Years Service
processed

ANNUAL
94 REPORT 2023-24
 ANNUAL 95
REPORT 2023-24
 MESSAGE FROM THE
ENVIRONMENT AND SOCIAL FOCAL PERSON

Dear Stakeholders,

At Siddhartha Bank, sustainability is at the heart of our strategic

objectives. As the Environment and Social Focal Person of the Bank, I
am honored to share our progress and commitment to fostering an
environmentally conscious, socially responsible, and economically
sustainable future. Our approach to sustainability is guided by Nepal’s
commitment to the Sustainable Development Goals (SDGs) 2030,
the Paris Agreement, and the country’s target of achieving net-zero
emissions by 2045.

In alignment with these goals, we have made significant strides in

integrating sustainability into our core banking operations and corporate
culture. Here are some key initiatives:

STRENGTHENING SUSTAINABILITY GOVERNANCE

To embed sustainability at all levels, we have established a dedicated Environmental and Social (E&S) Division. This unit
ensures the effective implementation of the Environmental and Social Risk Management System (ESMS). Additionally,
Siddhartha Bank discloses information about its Environmental & Social (E&S) Focal Point on its website, providing stakeholders
with direct access to address grievances

DEVELOPING A “GREEN DNA”

We are cultivating a sustainability-driven culture within our Bank and among stakeholders. Our partnerships with Invest for
Impact Nepal (IIN) have helped us enhance our Environmental, Social, and Governance Management System. Furthermore, we
have signed a Project Services Agreement with the International Finance Corporation (IFC) to strengthen risk management,
digital finance, gender finance, and climate finance capacity.

Our sustainability awareness initiatives include:

 Earth Day and Environment Day Celebrations: Organizing clean-up campaigns, tree plantations, and awareness programs
on environmental conservation.

 Reducing Plastic Waste: Conducting awareness drives to minimize single-use plastics. Commitment to Net-Zero and
Renewable Energy

Siddhartha Bank is committed to achieving net-zero in operations. We are investing in renewable energy where 174 of our
branches have solar power backup system. Also, our energy-efficient data center optimizes performance while minimizing
the energy consumption through the use of smartly designed modular data center. Additionally, we are promoting electric
vehicles (EVs) within our banking operations and already purchased two EV for banking operation and two/four wheeler loan
facility to staff for purchasing EV vehicle.

LOWERING CARBON EMISSIONS IN OUR FINANCED PORTFOLIO

Recognizing the environmental impact of our financed projects, we have joined the Partnership for Carbon
Accounting Financials (PCAF) standard in an attempt to measure and eventually reduce CO2 emissions from our
investment portfolio. Our first GHG Disclosure Report for our Scope 3 Category 15 has already been published within
one year of Siddhartha Bank joining the PCAF, demonstrates our dedication in carbon accountability. We are also
working on quantifying our Scope 1 and Scope 2 emissions which we endeavor to achieve in the near future.

ANNUAL
96 REPORT 2023-24
SUSTAINABILITY THROUGH DIGITALIZATION
We are committed to digitizing banking services to reduce our environmental footprint. Our initiatives
include:
 Video Banking, Mobile Banking, and Online Account Opening: Reducing paperwork and branch visits.

 Loan against Fixed Deposit & QR Loans: Facilitating paperless credit approvals.

 Digital platform for core banking operations: Utilization of Loan Management System (LMS),
Electronic Data Management System (eDMS), Customer Relationship Management (CRM), etc. in our
core business operations eliminating the use of paper backed approval system.

 Siddhartha Rewards Program: Encouraging digital transactions and reducing paper use.

INVESTING IN HUMAN CAPITAL AND DIVERSITY

At Siddhartha Bank, we believe that sustainability begins with our people. We have:

 9 fully women-operated branches and 34 branches led by female managers.

 Provided NPR 1,354.27 million in loans for women entrepreneurs.

 Conducted 311 training programs, benefiting 6,473 participants.

SOCIAL RESPONSIBILITY: SOCIETY FIRST

Our Corporate Social Responsibility (CSR) initiatives are aligned with the UN SDGs. In FY 2023-24,
we contributed NPR 24 million towards: Education and Financial Literacy (48%), Healthcare (33%),
Environmental Conservation (12%), Culture and Tourism (3%), Infrastructure and Security (2%),
Afforestation (1%), and Gender Equality (1%).

ROADMAP TO A SUSTAINABLE FUTURE

Looking ahead, Siddhartha Bank aims to:

 Establish a dedicated ESG Division to oversee sustainability goals.

 Formulate our first ESG Policy and ESGMS Manual.

 Continue Scope 3 Category 15, GHG emissions disclosure for FY 2023-24.

 Strengthen partnerships with IFC, IIN, and global institutions for capacity-building in sustainable
finance.

As we move forward, Siddhartha Bank remains dedicated to responsible banking, ensuring that our
efforts contribute to a greener, more inclusive, and sustainable future. We thank you for your trust and
support in our journey toward sustainability.

Warm Regards,
Ira Pradhan
Environment and Social Focal Person
Siddhartha Bank Limited

ANNUAL 97
REPORT 2023-24
 ANNUAL
98 REPORT 2023-24
 BANK’S SUSTAINABILITY STRATEGY
WITH MEASURABLE OBJECTIVES/ TARGETS OF THE YEAR

Built on deep sustainability conscious foundations, the Bank has always led in thought and
action when it comes to environmental consciousness, social responsibilities and corporate
governance. Nepal’s solidarity towards Sustainable Development Goals 2030 and its
achievement as a member of the United Nations for obtaining peace and prosperity for the
people and the planet is also a guiding factor for sustainability cognizance. Besides, the Paris
Agreement is an international treaty on climate change that Nepal signed and ratified in 2016.
The agreement aims to limit global warming to 1.5°C above pre-industrial levels. Nepal has
committed to reducing greenhouse gas emissions and improving its ability to adapt to climate
change. This is further boosted by the country’s commitment to achieve net zero by 2045 as
stated in the Nepal’s Long term Strategy for Net Zero Emissions.

The Bank has separate Environmental and Social (ENS) division to look into the environmental
and social issues, know them, analyze and find the mitigation measures followed by continuous
monitoring. The Bank was able to meet the following objectives in the last fiscal year towards
sustainability:

 In order to further strengthen the Bank’s focus of Sustainability, the Information of ENS focal
Point/ Person of the Bank is disclosed in its website. This disclosure of information enables
the Bank’s stakeholders to lodge any grievances, complaints and information regarding
Environmental and Social issues directly to the E&S Focal Point/ Person providing them with
better access for problem resolution. SBL is one of the first commercial bank in Nepal to
disclose such information in its website.

 The Bank became a member of Partnership for Carbon Accounting Financials (PCAF) on July,
2023 (i.e. at the beginning of the FY 2023-24) to quantify the GHG emission in its commitment
towards sustainability of the organization and its portfolio.

 The Bank was able to publish its the 1st GHG Disclosure of its Scope 3 Caterogy 15 Emissions
within the first year of being a signatory to PCAF, whereas the required time period was
within 3 years. Till date, SBL is one of the fastest commercial bank in Nepal to publish its 1st
GHG disclosure upon joining the PCAF membership.

 The Bank collaborated with Invest for Impact Nepal (IIN) for establishment of environment,
social and governance management system in the Bank. A third party vendor, Environmental
Management Centre Pvt. Ltd. (EMC) has been selected for establishment of Environmental,
Social and Governance Management System (ESGMS) in the Bank which is currently
undergoing.

 The Bank has collaborated with International Finance Corporation (IFC) to build the capacity
of the Bank on four key aspects viz-a-viz; Risk Management, Gender Finance, Digital Finance
and Climate finance. The project is currently underway and we are confident that the
takeaway from this Project Service Advisory shall support the Bank in paving the way
towards its sustainability journey

 In order to develop knowledgeable human resources in the field of ESG, the Bank has
nominated one official for “Course on ESG and Sustainable Finance” under UPF Barcelona
School of Management.

 The Bank has been aligning its CSR activities with UN SDGs and the details of the same has
been explained in the CSR section of this report.

The Bank has its strategies in place for the following fiscal year 2024-25 as well with major
important aspects in order to achieve continuous progression towards sustainability.

 Formation of a separate Environmental, Social and Governance (ESG) Division in order to

cater the Bank’s overall sustainability objectives. This shall open door towards the Bank’s
operational sustainability as well.

ANNUAL 99
REPORT 2023-24
  Formulation of its first ESG Policy and Environmental, Social  The Bank in each of its activities shall look into the
and Governance Management System (ESGMS) Manual. possibilities of inclination towards net zero emission to be
These shall be the most important guiding documents in line with the country’s target of net zero within 2045.
towards sustainability.
 The Bank shall continue its CSR activities by aligning with
 Disclosure of its GHG emission for FY 2023-24 for its UN SDGs.
stakeholders. The Bank shall carry on disclosure of GHG
emission as its regular duty towards transparency on  The Bank shall be drafting its own Client Protection Policy
non-financial disclosures. respecting Good International Industry Practices (GIIP)
and domestic rules and regulations.
 Continuation of its “Project Services Agreement”
with IFC for internal capacity building and effective Way ahead, SBL aims to have a robust ESG system in place
implementation internally as well as in its portfolio level. by aligning its policies and procedures, streamlining of
Bank’s operation towards achieving carbon minimization,
 Nominate additional human resources for “Course on ESG robust reporting mechanism to analyze E&S status of the
and Sustainable Finance” under UPF Barcelona School Bank, its clients, other stakeholders for further improvement,
of Management for increasing the strength on ESG and Refined Business Operations by good Corporate
develop all these certified officials in the form of trainers Governance Practices and a green DNA instilled in its
to educate more employees. The Bank has aimed for stakeholders for way forward towards sustainability.
knowledge enrichment of its employees and develop a
“Green DNA” within them.

ACTIONS TAKEN BY THE BANK TO BECOME MORE SUSTAINABLE

& CONTRIBUTE TO A SUSTAINABLE GLOBAL ECONOMY
The Bank has taken the following steps towards sustainability and contribute towards sustainable global economy:

CAPACITY BUILDING going digital on as many platforms as possible for Bank’s

Without a knowledgeable and educated team regarding internal operations, reducing the use of paper by facilitating
sustainability, it is impossible to achieve our sustainable various operational approvals and self-service activities
goals. Therefore, the Bank has targeted for capacity building through digital platforms such as LMS, eDMS, Human Capital
of its human capital as the first and the most important Management System, CRM, BankSmartXP, EasyBank, Video
objectives towards sustainability. As a result, the Bank has Banking and Siddhartha Automated Transaction System
had agreements with IFC, IIN and EMC for internal capacity (SATS), etc.
building so that good international practices are embedded
within the Bank culture. Encouraging and nominating towards CARBON DISCLOSURE REPORT
ESG courses is one of the important step as well. With the country already setting the target for Net-zero
emission by 2045, it became a necessity for the Bank to
UN SDGs ALIGNED CSR disclose its Green House Gas Emission. While the Bank is
The Sustainable Development Goals (SDGs), also known as responsible for its Scope 1 and Scope 2 emission from its
the Global Goals, are a universal call to action to end poverty, direct operations, the GHG emissions arising from the Bank’s
protect the environment, reduce economic inequality and financed investments are significantly higher than its own
ensure peace and justice for all. The Government of Nepal direct emissions. Understanding the impact of the Bank’s
too is guided by the National Planning Commission’s 15 year financed investment’s impact on GHG emissions, Siddhartha
roadmap to achieve Sustainable Development Goals in the Bank Limited became a signatory for Partnership for
country. Therefore, the Bank has undertaken its CSR activities Carbon Accounting Financials (PCAF) standard to attempt
by mapping with SDGs and contribute for the achievement to disclose its financed emissions in July 2023. Hence, Bank
of those SDGs and the details of the same has been successfully prepared and disclosed its voluntary Scope
explained in the CSR section of this report. 3 Category 15 emission disclosure for FY 2022-23 from the
Bank’s investment in assets classes “ Project Finance” and “
DIGITAL FIRST Business loans and Unlisted Equity” under the PCAF standard.
SBL runs with a vision to be the digital first Bank for Becoming a signatory to the PCAF standard requires
sustainable growth and its mission statement is customer disclosure of its emissions within 3 years from the date of
delight by offering diverse products and services digitally joining which Siddhartha Bank Limited was able to do within
for stakeholder’s prosperity and sustained growth. SBL its first year itself hence portraying its commitment towards
has been focusing on minimizing its carbon footprints by sustainability. It is currently preparing the second disclosure
for the FY 2023-24.

ANNUAL
100 REPORT 2023-24
 SUSTAINABILITY
REPORT FOR FY 2023-24
TRIPLE BOTTOM LINE

PEOPLE PLANET
The Bank is committed towards the social aspect of The Bank has emphasized environmental sustainability
sustainability, including the well-being of customers, as one of its corporate conscience and over the years
employees, community, and the society at large. The has aligned its business and operations to protect the
Bank prioritizes customer satisfaction, fair treatment of environment and preserve the planet. The Bank largely
employees, community focusses on reduction of carbon footprint from its
engagement, inclusive operations; reduction in energy consumption &
financial services and paper usage, investment in green energy,
promotion of diversity lending to hydropower projects and
and inclusion within investment in digitization to reduce
PLANET
the Bank. The Bank is environmental implications. The
equally committed Bank has achieved substantial
to contribute for reductions in paper usage and
the empowerment customers footfall in branches
of women and through use of digital channel
deprived sector. for internal operations and
customers service respectively.
The Bank operates Further, the Bank has been
196 branches
PEOPLE operating more than 175
including 5 branches through use of solar
extension counter power. Furthermore, around
and provide 8.64% of total loan exposure
services from 54 of the Bank is in hydropower
district of country. sector for electricity generation.
The Bank provides The Bank has also conducted
direct employment to PROFIT various tree plantation programs
1982 staffs and spent NPR around the country, provided financial
47.26 million in training and support for park construction, conducted
development during FY 2023-24. The cleanliness programs at local levels, provided
Bank conducted 311 training programs financial support for waste storage, and has conducted
for 6,473 participants and felicitated 21 employees for awareness through social media regarding the adverse
being associated with the Bank for more than 15 years. In the effect of single use plastic. The Bank is committed to support
FY 2023-24, the Bank promoted 146 staffs based on merit, our customers’ transition towards lower-carbon business
while more than 1051 employees have been availing home models.
loan facilities from the Bank amounting NPR 5,215.08 million to
staff as employee loan facilities under home loan, personal PROFIT
loan and vehicle loan. Siddhartha Bank ensures that its operations are profitable
not just in the short term, but also in the long term. The
The Bank spent NPR 24 million under different CSR initiatives Bank ensures consideration of the environmental, social,
falling under different Sustainable Development Goals in FY and governance (ESG) aspects in its pursuit of profits. The
2023-24. The Bank provided loans for women entrepreneurs Banks adopts sustainable business practices that generate
amounting to NPR 1,354.27 million, women retail loan profits while minimizing negative impacts on society and
amounting to 17,214.71 million, loan to deprived sector the environment. The Bank earned NPR 3.08 billion as net
amounting to NPR 10,076.79 million till end of fiscal year. profit during current fiscal year with a tax contribution to
The Bank operates 73 Branchless Banking unit in remote government of NPR 3.35 billion.
areas for enhancing access to finance and to contribute to
sustainable development of communities.

ANNUAL 101
REPORT 2023-24
 EMPOWERING COMMUNITIES THROUGH FINANCIAL
INCLUSION AND SUSTAINABLE BANKING

CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES CARBON EMISSION DISCLOSURE

Siddhartha Bank Limited has consistently prioritized Siddhartha Bank Limited (SBL) has taken a significant
corporate social responsibility, aligning its initiatives with step towards sustainability by becoming a member of
the Sustainable Development Goals (SDGs) to drive positive the Partnership for Carbon Accounting Financials (PCAF)
societal change. In FY 2023-24, the Bank carried out CSR in July 2023. This membership underscores the Bank’s
activities amounting NPR 24 million across key focus commitment to quantifying and reducing greenhouse
areas, including healthcare (33%), education (48%), gender gas (GHG) emissions across its operations and portfolio.
equality (1%), and environmental conservation (12%). Notable Demonstrating its dedication to transparency and climate
contributions pledged NPR 10 million to Kathmandu Institute action, SBL successfully published its first GHG disclosure
of Child Health’s pediatric hospital, disbursing NPR 2 million within the first year of joining PCAF, well ahead of the three-
so far, NPR 1 million for anti-fraud awareness campaigns year requirement. This achievement positions SBL as one of
in collaboration with Nepal Police, and support for 255 the fastest commercial banks in Nepal to publish its GHG
women entrepreneurs through entrepreneurship training. disclosure upon joining PCAF. As part of this initiative, the Bank
The Bank also organized nationwide blood donation drives, has committed to disclosing Scope 3 emissions, marking
funded cataract surgeries, and distributed relief packages a crucial milestone in its journey towards environmental
to earthquake-affected families in Jajarkot and Rukum. accountability and sustainable financing. These efforts
Environmental initiatives, such as cleanliness campaigns, reflect SBL’s proactive approach to addressing climate
tree plantation drives, and No Print Day, further highlight SBL’s change and fostering a greener future.
commitment to sustainability and community well-being.
These efforts reflect the Bank’s holistic approach to CSR,
fostering long-term social and environmental impact.

PARTNERSHIP WITH INTERNATIONAL ORGANIZATION

International Finance Co-operation (IFC): Commitment to This collaboration aims to enhance SBL’s capabilities in
Sustainable Financing and Capacity Building environmental and social governance, further aligning
Siddhartha Bank Limited (SBL) has taken significant steps in the Bank’s operations with global sustainability standards.
advancing sustainable economic growth through strategic Through this partnership, SBL continues to demonstrate its
collaborations and capacity-building initiatives. On 16th May dedication to promoting responsible banking practices and
2023, the Bank secured External Commercial Borrowing (ECB) contributing to Nepal’s sustainable economic growth.
of USD 55 million from the International Finance Corporation
(IFC). This funding is dedicated to supporting Micro, Small, BANK PRODUCT/SERVICES: IDENTIFY COMMUNITY
and Medium Enterprises (MSMEs) and promoting climate REQUIREMENT AND TAILOR PRODUCT
financing in Nepal, reinforcing the Bank’s commitment to FOR ACHIEVING SUSTAINABILITY
fostering sustainable development. Additionally, on 28th As part of our commitment to sustainability, financial
March 2024, SBL entered into a Project Services Agreement inclusion, women empowerment, and digitization, Siddhartha
with IFC to enhance its capabilities in key areas such as Bank has introduced a range of innovative products
Risk Management, Gender Finance, Digital Finance, and and services aligned with the United Nations Sustainable
Climate Finance. These initiatives underscore SBL’s proactive Development Goals (SDGs). These initiatives aim to enhance
approach to integrating sustainability into its operations, accessibility, foster economic growth, and promote digital
empowering businesses, and contributing to a greener, more transformation.
inclusive economy.
HAMRO GHAR KARJA – PROMOTING WOMEN’S PROPERTY OWNERSHIP
Invest for Impact Nepal (IIN): Strengthening Environmental (SDG 5: GENDER EQUALITY, SDG 11: SUSTAINABLE CITIES AND
and Social Capacity Building COMMUNITIES)
In its ongoing commitment to sustainability, Siddhartha Siddhartha Bank is dedicated to increasing women’s asset
Bank Limited (SBL) signed a Memorandum of Understanding ownership through the “Hamro Ghar Karja” home loan. This
(MoU) with Invest for Impact Nepal (IIN) on 24th May 2023. product provides a 0.25% interest concession when availed
IIN, a program jointly established by British International in a woman’s name and when the land and building are
Investment (BII), The Dutch Entrepreneurial Bank (FMO), and registered under her ownership. This initiative supports
Swiss Development Cooperation (SDC), and implemented women’s financial independence and asset ownership,
by Nathan Associates London Ltd., focuses on fostering fostering long-term economic stability. Till the fiscal year
sustainable development through capacity building. end 632 women have already availed home loan under this
scheme.

ANNUAL
102 REPORT 2023-24
SIDDHARTHA NARI BACHAT KHATA – EMPOWERING WOMEN’S FINANCIAL QR LOAN FOR MERCHANTS – BOOSTING SMALL BUSINESSES (SDG
GROWTH (SDG 5: GENDER EQUALITY, SDG 8: DECENT WORK AND 8: DECENT WORK AND ECONOMIC GROWTH, SDG 9: INDUSTRY,
ECONOMIC GROWTH) INNOVATION, AND INFRASTRUCTURE)
This specialized savings account is designed to encourage To empower micro and SME businesses, Siddhartha Bank
women to enhance their financial well-being. Offering higher introduced QR Loans via Banksmart. Merchants utilizing
interest rates and various ancillary benefits, the product the Bank’s QR payment system can instantly access credit
provides a free Debit Card, Standard Credit Card, Banksmart through the mobile banking platform. This initiative supports
XP, and account statements for the first year. These features small businesses by ensuring quick and easy access to
ensure women have access to modern banking solutions, financial resources, driving economic growth and financial
encouraging financial independence and security. inclusion.

SIDDHARTHA JESTHA NAGARIK BACHAT KHATA – SUPPORTING SENIOR LOAN AGAINST FIXED DEPOSIT THROUGH BANKSMART – FACILITATING
CITIZENS (SDG 3: GOOD HEALTH AND WELL-BEING, SDG 10: REDUCED INSTANT CREDIT ACCESS (SDG 9: INDUSTRY, INNOVATION, AND
INEQUALITIES) INFRASTRUCTURE, SDG 12: RESPONSIBLE CONSUMPTION AND
Recognizing the financial needs of senior citizens, this PRODUCTION)
savings account offers attractive interest rates, free account Customers can now request loans against fixed deposits
statements, and priority access to locker facilities. This digitally through Banksmart. This service streamlines loan
initiative ensures financial stability and ease of banking processing, reducing paperwork and promoting efficient
for elderly customers, contributing to their well-being and digital banking. During the last fiscal year, a significant
financial security. number of customers leveraged this service for their
financial needs.

NARI DEBIT CARD – ENHANCING WOMEN’S FINANCIAL WELL-BEING (SDG

3: GOOD HEALTH AND WELL-BEING, SDG 5: GENDER EQUALITY) ONLINE FIXED DEPOSIT OPENING – A SUSTAINABLE BANKING APPROACH
The Nari Debit Card is tailored for Siddhartha Nari Bachat (SDG 9: INDUSTRY, INNOVATION, AND INFRASTRUCTURE, SDG 12:
RESPONSIBLE CONSUMPTION AND PRODUCTION)
Khata holders, providing a financial tool that also contributes
Siddhartha Bank enables customers to open fixed deposit
to women’s health initiatives. A 0.10% contribution from every
accounts digitally via Banksmart. This hassle-free process
transaction made via POS or e-commerce goes toward
eliminates the need for physical branch visits and paper-
women’s health welfare programs. Since its launch, over
based forms, ensuring a seamless and eco-friendly banking
10,495 women have availed this unique product, reinforcing
experience.
our commitment to gender inclusivity and health support.

BANK’S SERVICE NETWORK: EXPANDING ACCESS

SIDDHARTHA REWARDS – ENCOURAGING DIGITAL TRANSACTIONS
(SDG 9: INDUSTRY, INNOVATION, AND INFRASTRUCTURE, SDG 12: AND PROMOTING SUSTAINABILITY
RESPONSIBLE CONSUMPTION AND PRODUCTION)
Siddhartha Bank introduced Nepal’s first-of-its-kind bank- AGENT BANKING: BRIDGING THE FINANCIAL GAP IN RURAL NEPAL
wide loyalty program, rewarding customers for utilizing Siddhartha Bank is committed to enhance financial inclusion
digital banking channels. Points accrued through Debit by providing agent banking services in remote and rural
Cards, Credit Cards, Prepaid Cards, and Mobile Banking areas across Nepal. This initiative aligns with the United
transactions can be redeemed for various benefits. This Nations’ Sustainable Development Goals (SDGs), particularly
program encourages paperless banking and reduces the in reducing inequalities and promoting economic growth.
environmental footprint by promoting digital services. Currently, the Bank operates 73 active agent banking outlets
nationwide, enabling individuals in underserved regions
ONLINE ACCOUNT OPENING & VIDEO BANKING – ENHANCING DIGITAL to access essential banking services without the need to
ACCESS (SDG 9: INDUSTRY, INNOVATION, AND INFRASTRUCTURE, SDG visit a branch office. Through these agent banking network,
12: RESPONSIBLE CONSUMPTION AND PRODUCTION) customers can conveniently open accounts, deposit and
To facilitate seamless banking, Siddhartha Bank launched transfer funds, repay EMIs, make third-party deposits, and
video banking services that enable customers to open even request loans.
savings and Demat accounts online. Customer verification is
conducted through secure video banking, reducing branch By extending financial services to marginalized communities,
visits and eliminating paper-based processes, further Siddhartha Bank empowers individuals, supports small
contributing to sustainability. businesses, and fosters local economic development. This
initiative plays a vital role in bridging the urban-rural financial
EASYBANK SERVICES – SIMPLIFYING DIGITAL BANKING (SDG 9: divide, encouraging digital transactions, and promoting
INDUSTRY, INNOVATION, AND INFRASTRUCTURE, SDG 12: RESPONSIBLE long-term financial sustainability in Nepal.
CONSUMPTION AND PRODUCTION)
Our EasyBank platform provides a comprehensive suite of
ATM NETWORK: ENHANCING ACCESSIBILITY AND PROMOTING
online banking services, including fixed deposit opening,
SUSTAINABILITY
account registration, KYC updates, card requests, and
The Bank continues to expand its ATM network to enhance
more. This initiative enhances customer convenience while
accessibility and encourage digital transaction. During the
reducing reliance on physical banking services, thereby
fiscal year 2023-24, the Bank increased its ATM network
supporting environmental sustainability.
from 225 to 227, reinforcing its commitment to providing
convenient and seamless banking services to both
customers and non-customers.

ANNUAL 103
REPORT 2023-24
 The 7,422,933 ATM transactions recorded during the year reducing carbon footprint by minimizing paper usage and
significantly contributed to reducing the reliance on physical visits. These platforms offer seamless, efficient, and
traditional banking methods, such as cheque issuance, while customer-centric banking solutions:
also minimizing branch footfall. This shift towards digital cash
withdrawals not only enhances customer convenience but  EasyBank: A comprehensive web based banking platform
also aligns with the Bank’s sustainability goals by reducing providing a range of financial services remotely.
paper usage and promoting environmentally friendly
banking practices. By expanding its ATM network, Bank  Banksmart: A mobile banking solution enabling
continues to support financial inclusion while fostering a customers to manage transactions and request service
more sustainable and efficient banking ecosystem. to branches through remote location anytime.

 Website: A digital portal for banking information, self-

BRANCH NETWORK: STRENGTHENING FINANCIAL INCLUSION ACROSS service options, and customer support.
NEPAL
Siddhartha Bank has steadily expanded its branch network  Contact Center: A dedicated helpline ensuring real-time
to enhance accessibility and provide seamless banking assistance for customer queries, service request available
services across Nepal. As of the fiscal year 2023-24, the Bank for 24/7 customer support.
operates 191 branches and 5 extension counters across
54 districts, ensuring a strong presence in both urban  Video Banking: A virtual banking service allowing face-to-
and rural areas. Notably, 30 branches are located in rural face interactions for enhanced customer support.
municipalities, directly serving communities with limited
access to financial services.  KIOSK Banking: Self-service machines for quick and
efficient banking transactions.
By strategically expanding its branch network, Siddhartha
By leveraging these digital platforms, Siddhartha Bank
Bank plays a crucial role in promoting financial inclusion,
enhances customer convenience while contributing to a
bridging the gap between urban and rural populations, and
greener and more sustainable banking ecosystem
supporting local economies. The Bank continues to cater to a
growing customer base, with 16.82 million deposit customers
currently availing services through its widespread network. ENHANCING WOMEN’S ACCESS TO DIGITAL BANKING
This existing branch network display the Bank’s commitment As part of its commitment to gender equality and financial
to fostering economic growth, reducing financial disparities, inclusion, the Bank actively encourages women to utilize
and contributing to sustainable development across Nepal. digital banking services. The increasing adoption of digital
channels by women reflects progress toward bridging the
gender gap in financial access.
INCLUSIVE BANKING: ACCESSIBLE BRANCHES AND ATMS FOR ALL
Siddhartha Bank is committed to ensuring financial services
are accessible to all, including individuals with disabilities. DIGITAL CHANNEL NUMBER OF WOMEN CUSTOMER
As part of its efforts to promote inclusivity and align with BankSmart 337,330
Sustainable Development Goal #10; Reduced Inequalities, the
Debit Card 104,178
Bank has designed its infrastructure to be disability-friendly.
Credit Card 9,220
Currently, 8 branches and 75 ATMs across Nepal are Prepaid Card 8,981
equipped with features that facilitate ease of access for
individuals with disabilities. By prioritizing inclusive banking, DIGITIZATION OF LOAN SERVICES: INSTANT AND PAPERLESS CREDIT
Siddhartha Bank ensures that all customers, regardless SOLUTIONS
of physical limitations, can avail themselves of essential As part of its digital transformation, Siddhartha Bank has
financial services independently and with dignity. This introduced instant and paperless loan services, ensuring
initiative reflects the Bank’s broader commitment to social quick access to credit while promoting environmentally
responsibility, equality, and sustainable banking practices, friendly banking. These digital loan services include:
reinforcing its role in building a more inclusive financial
ecosystem.  Loan Against Fixed Deposit – Customers can instantly
avail loans against their fixed deposits without paperwork.
BANK DIGITIZATION AND SUSTAINABILITY  QR Loan to Merchants –Instant loan facility designed
Siddhartha Bank is dedicated to integrating digital
for small businesses, enabling seamless credit access
solutions that enhance service efficiency while reducing
through QR-based transactions.
environmental impact. By shifting to digital platforms, the
Bank minimizes paper usage, reduces the need for physical  Online Credit Card Application – A fully digital process for
branch visits, and promotes sustainable banking practices. applying and receiving credit cards, eliminating the need
for physical branch visit.

DIGITIZATION OF SERVICE DELIVERY: ENHANCING ACCESSIBILITY AND

SUSTAINABILITY By embracing digital loan services, Siddhartha Bank
To enhance customer experience and promote virtual accelerates financial accessibility, empowers small
banking, Siddhartha Bank has invested in various digital businesses, and reduces the environmental impact of
service delivery channels, ensuring 24/7 accessibility while traditional lending.

ANNUAL
104 REPORT 2023-24
DIGITAL PLATFORMS FOR INTERNAL OPERATIONS: REDUCING PAPER  Customer Relationship Management (CRM): A
USAGE AND ENHANCING EFFICIENCY
centralized system for managing customer interactions
Siddhartha Bank has integrated advanced digital solutions to
through multiple digital channels such as phone calls,
streamline internal operations, minimize manual processes,
email, Viber, WhatsApp, and the Bank’s website, ensuring
and significantly reduce paper usage. By automating key
efficient and paperless service delivery.
banking functions, the Bank enhances efficiency, accelerates
service delivery, and contributes to sustainable and  Online Banking Page: A digital platform for customer
environmentally friendly banking practices. engagement, information sharing, and awareness-
building, reducing the need for printed materials.
Key digital initiatives within the organization include:
 EasyBank: An online banking portal that facilitates
 SATS (Siddhartha Automated Transaction System): A requests for account openings, ancillary banking
comprehensive platform that digitizes all internal manual products, loan applications, and KYC update streamlining
processes, seamlessly integrates with the Core Banking service requests without paperwork.
System and other applications, and enables instant
service execution while reducing paperwork.  BankSmart (Mobile Banking): A one-stop digital channel
that enables customers to request banking services
 Loan Management System (LMS): A fully digital platform remotely, reducing branch visits and supporting paperless
for processing credit proposals, eliminating physical transactions.
documents in loan applications and approvals.
 HCMS (HR Application): Human Capital Management
 Robotic Process Automation (RPA): An AI-driven System that automates internal staff requests, eliminating
automation system that independently carries out routine paper-based HR processes and manual administrative
banking processes based on predefined rules, eliminating tasks within the Bank’s operations.
the need for manual intervention and significantly
reducing documentation and resource usage. By leveraging these digital platforms, Siddhartha Bank
ensures seamless service execution, increased efficiency,
 Video Banking for Customer Verification: Enables and a significant reduction in environmental impact,
remote verification for online account openings, reinforcing its commitment to sustainable and technology-
eliminating the need for in-person visits and physical driven banking.
document collection.

ANNUAL 105
REPORT 2023-24
 BANKING OPERATION AND BANKING BUSINESS
TOWARDS ACHIEVING SDG GOALS

ANNUAL
106 REPORT 2023-24
SUSTAINABLE DEVELOPMENT GOALS INVOLVEMENT MEDIUM NPR IN MILLION

Health CSR 7.92

Education and
CSR 11.49
Financial Literacy

Gender Equality CSR 0.13

Culture and
CSR 0.67
Tourism

Environment
CSR 2.99
Cleanliness

Afforestation CSR 0.34

Infrastructure &
CSR 0.46
Security

Agriculture Financing 25,489.34

Energy (Renewable
Financing 17,170.63
Energy)

ANNUAL 107
REPORT 2023-24
 SUSTAINABLE DEVELOPMENT GOALS INVOLVEMENT MEDIUM NPR IN MILLION

Micro, Cottage,
Small and Medium Financing 14,999.55
Industries

Electric Vehicle Financing 3,389.66

Women
Entrepreneurship
Financing 1,354.27
Loan(Interest
Subsidy)

COMPARATIVE ANALYSIS OF FY 2022-23 AND 2023-24 ACHIEVEMENTS

SUSTAINABLE DEVELOPMENT GOALS INVOLVEMENT MEDIUM 2022-23 2023-24

Banking
Tax Payment NPR 2.99 Billion NPR 3.35 Billion
Operation

Banking
Agent Network 123.00 73.00
Network

Solar power
backup
system in Banking
branches and Network and 173.00 174.00
purchase of Operation
EVs for banking
operations

IFC(External
Partnership
Commercial
with Banks
- Borrowing)
international Partnership
IIN (capacity
agencies
building)

196(including 196(including
5 extension 5 extension
Branch counter) counter)
network Banking network within network within
including rural Network 54 districts, 54 district,
branches 30 branches 30 branches
operate in rural operate in rural
municipality municipality

ANNUAL
108 REPORT 2023-24
SUSTAINABLE DEVELOPMENT GOALS INVOLVEMENT MEDIUM 2022-23 2023-24

Employment
Creation, Banking
1,970 Permanent staff 1,982 Permanent Staff
Increase in Operation
number of Staff

Employment
Creation, Banking 735 Women 757 Women Permanent
Increase in Operation Permanent Staff Staff
number of Staff

204 training program 311 training program

Banking
Training to Staff engaging 3,783 engaging 6,473
Operation
participant participant

20 training program 22 training program

Training to Staff Banking with virtual mode with virtual mode
(Virtual Mode) Operation engaging 2,011 engaging 3,105
participants participants

146 employees
Banking 215 employees promoted
Staff Promotion
Operation promoted (Male: 89
Female:57)

Minimum Medical Minimum Medical

Insurance
Insurance Covergae: Insurance Covergae:
Coverage
NPR 100,000; NPR 100,000;
(Medical, Life
Life Insurance Life Insurance
Insurance and Banking
Coverage:20 Years Coverage:20 Years
Accidental Operation
endowment policy; endowment policy;
Insurance
Accidental Coverage Accidental Coverage
Coverage) to
: Range from NPR 1 : Range from NPR 1
staff
million to 7.5 million million to 7.5 million

Home Loan upto NPR

Home Loan upto NPR
15 million, Personal
17.5 million, Personal
Staff Loan Loan upto NPR 1
Loan upto NPR 1 million
(Personal Loan, Banking million and vehicle
and vehicle loan: 2
Home Loan, Operation loan: 2 wheeler
wheeler NPR 0.4 million
Vehicle Loan NPR 0.3 million &
& 4 wheeler NPR 2.2
4 wheeler NPR 2.2
million to 6.5 million
million to 6.5 million

All Women Branches : 9

(among 196 including 5
Banking
- extension counter) and
Operation
Women led Branches:
34

ANNUAL 109
REPORT 2023-24
 SUSTAINABLE DEVELOPMENT GOALS INVOLVEMENT MEDIUM 2022-23 2023-24

Mobile Banking 1,006,766

Banking
User including 832,222 (337,330
Network
women users women)

Cash
Withdrawal
Transaction
Banking
through ATM/ - 7,536,820
Network
Smart QR
eliminating
paper use

Debit card
Banking 807,032 (104,178
service and 685,560.00
Network women)
women access

Credit Card
Banking 50,176 (9,220
User and 38,848
Network women)
women access

Loan Against
Fixed
Loan Service Deposit:6,686
Banking
through Digital - Loan to QR
Network
Channels Merchant: 837
Online Credit
Card: 196

Video Banking
for Customer
Verification,
EasyBank
for Account
Digital services Opening,
Banking
like video - Ancilliary
Operation
banking Service ,
service and
loan Request
through
BankSmart,
and EasyBank

Customer 124 grievance

Banking
Grievance - request and all
Operation
Handling resolved

Disability
friendly Branch Branches: 8
Branches and Network ATM :75
ATM locations

ANNUAL
110 REPORT 2023-24
GOVERNANCE AND SUSTAINABILITY

IT GOVERNANCE AND SUSTAINABILITY

Governance and Oversight improvement. The audit revealed that SBL’s IT environment
The Bank has established a dedicated Information Systems is robust, with advanced technological solutions such as
Department, operating under the Integrated Risk Department firewalls, Multi-Factor Authentication (MFA), VPN tunneling,
of the Bank and reporting to Risk Management Committee. and Privileged Access Management (PAM) in place. However,
Further, independent internal audit team conducts it highlighted the need for consistent documentation
regular and comprehensive audits of our IT infrastructure, practices, enhanced employee training, and regular
applications, and data management systems to identify Vulnerability Assessment and Penetration Testing (VAPT) to
and mitigate potential risks. Additionally, the Bank engages address potential security gaps.
independent external auditors to provide an unbiased
assessment of our IT controls and processes, ensuring The VAPT exercise identified vulnerabilities across external
transparency and accountability. and internal infrastructure, including critical issues
such as Glassfish Path Traversal, Weak SSH Passwords,
Information Technology Systems and Controls including and Unauthorized Access to APIs. These findings were
data privacy and cyber security categorized using the CVSS v3.1 scoring system, with
The Bank has invested in advanced software and network detailed recommendations provided to mitigate risks. Key
security devices to enhance the security and resilience of recommendations include implementing strong password
its IT infrastructure. The Information Security Department policies, adopting secure coding practices, and conducting
(ISD) and the Identity Access Management (IAM) unit are periodic security assessments and breach assessments. The
responsible for safeguarding the Bank’s data and systems Bank is also committed to regularly updating its Information
against unauthorized access, ensuring Confidentiality, Security Policies and enhancing continuous monitoring
Integrity, and Availability (CIA). These units implement and and incident management capabilities to ensure a resilient
maintain organization-wide security policies, standards, security posture.
and procedures while collaborating with the IT Department
and other key stakeholders to conduct functionality and SBL’s management and IT team are diligently working to
gap analyses. Regular risk assessments are carried out in implement the audit recommendations, ensuring the Bank
alignment with regulatory guidelines, including the NRB IT remains at the forefront of technological advancement
Guidelines and industry best practices such as PCI DSS, ISO and cybersecurity in Nepal’s banking sector. These efforts
27001:2013, and ISACA’s COBIT 5 framework. The Bank has underscore our commitment to safeguarding customer
also implemented various security measures, including Web data, maintaining operational resilience, and aligning with
Application Firewalls (WAF), Privileged Access Management global best practices in IT governance and sustainability.
(PAM), and endpoint protection solutions, to detect and
mitigate cyber threats proactively. Policies and Execution
Siddhartha Bank has implemented multiple policies,
To further strengthen its cyber resilience, the Bank including Information Security Policy, Information Technology
conducts periodic IT risk assessments, external and Policy, Migration Policy, and Business Continuity Policy, to
internal vulnerability management exercises, and phishing govern our information systems. A separate Information
simulations to enhance staff awareness of cyber threats. Security Department and Identity Access Management
Backup and recovery procedures for critical systems are oversees the execution of these policies, ensuring alignment
regularly reviewed to ensure data integrity and business with the Bank’s strategic objectives and regulatory
continuity in the event of disruptions. Compliance with the requirements.
SWIFT Customer Security Programme (CSP) is continuously
monitored to meet international security standards, and Sustainability and Continuous Improvement
security event logs are analyzed daily for potential threats. As part of our commitment to sustainability, we continuously
The Bank remains committed to continuously enhancing enhance our IT governance framework to address evolving
its cybersecurity framework, implementing emerging technological and environmental challenges. By investing in
technologies, and adopting best practices to safeguard its advanced cybersecurity tools, employee training, process
digital assets, ensuring robust protection against evolving enhancement and sustainable IT practices, we aim to build a
cyber risks. resilient and future-ready digital ecosystem.

Information Systems (IS) Audit and Cybersecurity ESG GOVERNANCE AND SUSTAINABILITY
Governance
Siddhartha Bank Limited remains committed to maintaining
GOVERNANCE AND OVERSIGHT
the highest standards of governance, transparency, and
The Bank has established a dedicated Environmental and
security in its operations. In line with this commitment, the
Social Division, operating under the Credit Risk Department
Bank conducted a comprehensive Information Systems (IS)
and reports to Risk Management Committee. Likewise, Bank
Audit aligned with ISO/IEC 27001 standards, NRB IT Guidelines,
has also established dedicated CSR implementation unit
and ISACA ITAF frameworks, focused on three critical
under Marketing Department and Customer Grievance
elements People, Process, and Technology to evaluate
Handling Unit under Central Operation Department. In
the effectiveness of our IT controls and identify areas for
addition, independent internal audit team conducts regular

ANNUAL 111
REPORT 2023-24
 and comprehensive audits to identify and mitigate potential risks. The Bank tree plantation drives and financial
independent auditors provide an unbiased assessment of our existing processes, literacy campaigns, fostering
ensuring transparency and accountability. Furthermore, Grievance Handling a culture of environmental
Committee is formed within the organization responsible for reviewing all cases responsibility. The Bank also promotes
of misconduct to customer and staff. The committee conducts a detailed remote work arrangements and
analysis of the incident, its root cause, and the control gaps that may have energy-efficient practices, such as
resulted in such event/incident. installing LED lighting and optimizing
air conditioning usage.
POLICIES AND EXECUTION
The Bank has implemented multiple policies including Environment and Social RISK MANAGEMENT AND WORKFORCE
Risk Management Policy, Corporate Social Responsibility Policy, Grievance RESILIENCE
Handling Policy etc. A separate dedicated unit within the Bank carryout execution To strengthen workforce resilience,
of these policies, ensuring alignment with the Bank’s strategic objectives and the HR Department has implemented
regulatory requirements. a Workforce Risk Assessment
Framework, addressing talent
shortages, compliance violations,
DIGITAL CHANNEL
and workforce disruptions.
The Bank has already implemented Whistle Blowing portal for reporting event/
Cybersecurity awareness training
incident faced by the staff. Further, website and dedicated call center for
programs have been introduced
reporting any grievance by the customer is also active. Multiple channel like
to mitigate risks, while Crisis
WhatsApp, Viber, Call center, suggestion boxes at branches are also available to
Management Teams ensure
address customer issues. An independent Chief Grievance Handling Officer and
preparedness for natural disasters,
Chief Information Officer led by executive management for are also accessible
health emergencies, and other
to resolve any customer grievances whose information are presented in the
unforeseen events. These initiatives
website of the Bank.
reinforce the Bank’s commitment
to safeguarding its employees and
EMPOWERING PEOPLE, DRIVING SUSTAINABILITY HUMAN RESOURCE DEPARTMENT operational continuity.
At Siddhartha Bank Limited (SBL), our Human Resource (HR) Department plays
a pivotal role in fostering a sustainable, inclusive, and resilient workplace.
STAFF ENGAGEMENT AND DEVELOPMENT
By prioritizing employee well-being, embracing digitization, and integrating
The Bank actively promotes staff
sustainability into core operations, the HR Department ensures that our workforce
engagement through initiatives such
remains engaged, empowered, and aligned with the Bank’s mission of innovation
as the annual Siddhartha Sports
and excellence.
Fest, which featured futsal and table
tennis tournaments in FY 2023-24.
EMPLOYEE HEALTH, SAFETY, AND WELL-BEING
Employees also participated in 14
The Bank is deeply committed to the health, safety, and well-being of its
external corporate sporting events,
employees. Initiatives such as balanced work hours (09:30 AM to 05:00 PM,
winning prestigious titles such as the
Sunday to Thursday, and 09:30 AM to 02:00 PM on Friday) ensuring a healthy
Round Table Futsal Tournament 2023
work-life balance, reducing burnout and enhancing productivity. To bolster
and the Inter Bank Futsal Tournament.
workplace safety, Province-level Fire Safety and Earthquake Preparedness
Additionally, the Bank encouraged
training are conducted by the Bank. Additionally, first aid boxes have been
participation in marathons, including
installed in all office premises, ensuring quick access to medical supplies during
the Kantipur Half Marathon and the
emergencies. The implementation of a Whistle-Blowing Policy and a dedicated
Run for Autism Marathon, promoting
Whistle-Blowing Portal further promotes transparency and ethical practices,
mental well-being and work-life
while the Grievance Handling Committee ensures fair and prompt resolution of
balance. On the occasion of Teej
employee concerns.
Festival, specially curated gift boxes
were distributed to all female
DIGITIZATION AND OPERATIONAL EXCELLENCE employees, reaffirming the Bank’s
The HR Department has spearheaded a comprehensive digitization initiative commitment to gender inclusivity.
to enhance efficiency and transparency. Key milestones include the
implementation of Employee Wise, a cutting-edge Human Capital Management In FY 2023-24, the Bank conducted 311
System (HCMS), which provides employees with self-service portals for leave training programs, engaging 6,473
management, payslips, and attendance tracking. The Budget Management participants across all levels. These
System has been formalized to optimize financial planning, while a Learning programs, delivered both virtually
Management System (LMS) is being developed to create personalized learning and in-person, focused on enhancing
paths and automate training tracking. These advancements underscore the skills, promoting leadership, and
Bank’s commitment to leveraging technology for operational excellence. ensuring compliance. Notably, 2,526
female participated in 90 training
SUSTAINABILITY AND GREEN INITIATIVES sessions, reflecting the Bank’s
Sustainability is at the heart of the HR Department’s operations. Initiatives such commitment to empowering women
as paperless HR operations, green office policies, and sustainability training in the workplace.
have significantly reduced the Bank’s environmental footprint. Employees are
encouraged to participate in community engagement programs, including

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COMPREHENSIVE EMPLOYEE BENEFITS AND A ENHANCED LEAVE POLICIES
CULTURE OF CARE Recognizing the importance of work-life balance, the Bank introduced improved
Siddhartha Bank Limited (SBL) is leave policies to support employee well-being. Mandatory Annual leave was
dedicated to fostering a supportive increased to 13 working days, and casual leave was raised to 12 days, up from the
and inclusive workplace through previous 10 days and 9 days respectively. These changes reflect our commitment
a robust benefits package and to ensuring employees have ample time to rest, recharge, and attend to
initiatives that prioritize employee personal needs.
well-being and growth. Employees
enjoy comprehensive benefits,
EXPANDED LOAN FACILITIES
including medical allowances, group
To further support our employees’ financial well-being, the Bank enhanced its
medical insurance, life insurance,
staff loan facilities. The home loan limit was increased from NPR 15 million to NPR
and accidental insurance, ensuring
17.5 million, while the two-wheeler loan limit was raised from NPR 0.3 million to
their health and financial security.
NPR 0.4 million. These improvements demonstrate our ongoing efforts to provide
The Bank also provides various loan
meaningful financial benefits that empower employees to achieve their personal
facilities, such as home loans, personal
and professional goals.
loans, and vehicle loans, with recent
enhancements like an increase in the
home loan limit from NPR 15 million to CULTURE OF CARE AND GROWTH
NPR 17.5 million and the two-wheeler All Bank initiatives, coupled with comprehensive benefits such as medical
loan limit from NPR 0.3 million to NPR 0.4 allowances, insurance coverage, gratuity benefits, increment in salary through
million. two year review of salary scale and yearly performance appraisal reinforce
Siddhartha Bank’s commitment to creating a supportive and inclusive workplace.
In addition to financial benefits, the By investing in our employees’ growth, well-being, and financial security, we are
Bank recognizes and rewards long- building a resilient workforce that drives the Bank’s success and contributes to a
serving employees through initiatives sustainable future.
like the 15 Years’ Service Recognition
Felicitation Ceremony, conducted HR Department’s initiatives in employee well-being, digitization, financial security,
every year on the Bank’s Anniversary employee growth, sustainability, and risk management emphasizes Siddhartha
honoring staff for their dedication Bank’s commitment to creating a resilient, inclusive, and future-ready workforce.
and contributions. Furthermore, the By fostering a culture of innovation, transparency, and sustainability, the
Bank reinforces its commitment to Bank continues to empower its employees and drive long-term success and
employee growth through a two-year contribute to a sustainable future.
review of salary scales and yearly
performance appraisals, ensuring fair THE BANK’S CONTRIBUTION TO NATIONAL ECONOMY
increments and opportunities of career
progression. These initiatives, combined Siddhartha Bank plays a pivotal role in Nepal’s economic growth by
with a culture of care and inclusivity, contributing to various sectors through financial inclusion, employment
empower employees to thrive and generation, infrastructure development, and sustainable financing.
contribute to the Bank’s continued The Bank’s extensive network and strategic initiatives support national
success. economic stability while aligning with global sustainability goals.

EMPOWERING WORKFORCE: TRANSPARENT EMPLOYMENT GENERATION AND FINANCIAL INCLUSION

AND INCLUSION IN STAFF HIRING
The Bank provides direct employment to 1,982 staff members across 196
Siddhartha Bank Limited (SBL) continues
branches, including five extension counters. It ensures equal opportunity
to prioritize its most valuable asset,
employment, with 757 women employees contributing to a diverse and inclusive
its people. In FY 2023-24, the Bank’s
workforce. Additionally, the Bank promotes financial accessibility in underserved
workforce grew to 1,982 employees,
areas through 73 branchless banking units, empowering individuals and small
reflecting an increase from 1,970 in the
businesses by extending banking services to remote regions
previous year. This growth underscores
our commitment to expanding
opportunities and fostering a diverse INVESTMENT IN KEY SECTORS
and inclusive workplace. Siddhartha Bank actively invests in crucial sectors to drive national economic
growth:
In a significant milestone, 146
employees were promoted during  Micro, Cottage, Small, and Medium Enterprises (MSMEs): The Bank has
the year out of total staff 1982 (male: financed NPR 14,999.55 million to MSMEs, ensuring access to capital for small
1225 and female: 757). The ratio businesses and entrepreneurs.
of promotion are more in female  Renewable Energy: With NPR 17,170.63 million financing to clean energy
employee compared to male. (Female projects, the Bank supports hydropower and solar energy investments to
promoted: 57 and male promoted: reduce dependency on fossil fuels.
89). This achievement highlights the  Agriculture: The Bank has invested NPR 25,489.34 million in agricultural
Bank’s dedication to gender equality financing, fostering rural development and food security.
and creating a level playing field for all
employees to thrive and advance in
their careers.

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 CONTRIBUTION TO GOVERNMENT REVENUE
As a responsible corporate entity, Siddhartha Bank contributed NPR 3.35 billion in taxes during the fiscal year 2023-24, playing a
vital role in national revenue generation

INFRASTRUCTURE DEVELOPMENT AND DIGITAL BANKING EXPANSION

The Bank continues to enhance financial infrastructure by expanding its ATM network to 227 locations and improving digital
banking services. Initiatives like online account opening, digital lending, and mobile banking have facilitated seamless
transactions, reducing reliance on physical banking and promoting financial efficiency.

SUSTAINABLE AND INCLUSIVE BANKING

Siddhartha Bank aligns its activities with the UN Sustainable Development Goals (SDGs), integrating environmental and social
governance principles into its operations. The Bank’s CSR activities span healthcare, education, gender equality, environmental
conservation, and entrepreneurship training, reinforcing its role in Nepal’s socio-economic development.

CONTRIBUTION OF THE BANK TOWARDS EMPLOYEE HEALTH AND SAFETY

At Siddhartha Bank, ensuring the safety and well-being of response techniques to ensure our teams are ready to act
our employees is a top priority. Throughout the year, we swiftly during critical situations.
have implemented several initiatives and programs aimed
at enhancing workplace health and safety, promoting a FIRST AID BOX INSTALLATION
supportive work environment, and empowering employees As part of our ongoing commitment to health and safety,
to feel protected and valued. we have installed first aid boxes in all office premises. These
first-aid kits are strategically placed to ensure easy and
BALANCED WORK HOURS FOR EMPLOYEE WELL-BEING quick access in case of minor injuries or emergencies.
We recognize that maintaining a healthy work-life balance
is essential for employee productivity and overall well-being. IMPLEMENTATION OF WHISTLE-LOWING POLICY AND PORTAL
Our standard office hours, from 09:30 AM to 05:00 PM (Sunday To uphold integrity and transparency in our workplace, we
to Thursday) and 09:30 AM to 02:00 PM (Friday) ensure have circulated a Whistle-Blowing Policy and introduced a
employees have structured work schedules with ample dedicated Whistle-Blowing Portal. This initiative encourages
time for personal activities and rest. This balance is a critical employees to report any unethical practices or grievances
factor in preventing burnout and enhancing job satisfaction, confidentially, ensuring their voices are heard without fear
contributing to a positive work culture. of retaliation.

PROVINCE-LEVEL FIRE SAFETY & EARTHQUAKE PROPER GRIEVANCE HANDLING COMMITTEE

PREPAREDNESS TRAINING We have established a Grievance Handling Committee to
To strengthen our employees’ knowledge and preparedness address employee concerns in a structured and impartial
for emergencies, we organized three province-level Fire manner. This committee ensures all complaints and
Safety and Earthquake Preparedness Training, attended disputes are resolved fairly, promptly, and transparently,
by a total of 256 participants across different branches. fostering a culture of trust and respect within the
These comprehensive training sessions covered evacuation organization
procedures, risk mitigation strategies, and emergency

CORPORATE SOCIAL AND ENVIRONMENTAL POLICY

The Bank’s commitment to preserving the environment and facilities falling under any of the following categories: All
being socially inclusive is reflected through our responsible business Loans falling under critical sectors, Term Finance
lending protocols, which include a mandatory environmental above Rs. 10 million, Project Finance and Working capital
and social screening process. The Bank formulated the loans above Rs. 10 million (except trading businesses). The
ESRM Policy in June 2019. The Bank has made it mandatory to ratings received by credit clients play an essential role in
implement the ESRM policy in every business unit proposal. the Bank’s risk assessment of the business. Sustainability is a
major parameter the Bank looks for in terms of lending to its
The Bank has formalized screening of risks associated with customers.
environmental and social issues while extending credit
facilities to business units across the country. Every business The Bank has been proactively working to integrate its ESMS
unit needs to conduct an “Exclusion List” check in the policy into the organizational culture. The Bank is committed to:
and businesses falling under this list is rejected upfront.
The Bank has a practice of conducting Environment &  Recognize Environmental & Social responsibility as one of
Social Risk Due Diligence (ESDD) of business units for credit the key components of the Bank’s business strategies;

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114 REPORT 2023-24
 Train and develop respective employees to be ESRM  Review clients E&S performance and managing gaps &
compliant on each business loan file with clearly defined non-compliance through effective monitoring
E&S roles and responsibilities
 Disclose and report required information as per the
 Comply with NRB’s ESRM guidelines adhering to all regulatory requirement to ensure public accountability
relevant national legislation and regulations related to at the same time ensure confidentiality of customers’
Environmental and Social Sustainability information

 Maintain an up-to-date E&S Exclusion List and ensure the  Uphold the highest standards of business integrity and
Bank does not finance or limit our exposure to the extent good corporate governance
allowed in any project/activity as per the Exclusion List `
 Upgrade and enhance the Bank’s ESMS in line with
 Integrate ESRM in the Loan Management System for digital new developments in the E&S environment locally and
capturing of information for strong MIS and decision- adopting international best practices.
making process.  Address customer feedback, complaints, and fraud cases
through Grievance Handling Unit at the Central level as
 Obtain Corrective Action Plans for timely addressing well as branch offices. .
of ESRM issues and keeping special ESRM compliance
covenants upfront in Credit Acceptance Documents by  Implement Whistle Blowing platform for managing
the clients. internal staff workplace safety, complaints by maintaining
privacy.

CARBON DISCLOSURE REPORT

Siddhartha Bank Limited became a signatory of the Partnership for Carbon Accounting Financials (PCAF) standard on 20th
July 2023. Following the standard, Siddhartha Bank has been able to disclose its Scope 3 Category 15 Financed emissions of its
asset classes “Project Finance” and “Unlisted Equity and Business Loans” for the FY 2022-23. The result of the disclosure report is
as below:

DISCLOSURE METHOD
The Bank has referred International Standard Industrial Classification of All Economic Activities (ISIC) Rev. 4 Industry
Classification to Exiobase Industry Classification. The analysis is based on regional emission factors at industry level of ISIC
Code available from the PCAF database last updated on September 2023. The Exiobase Industry Classification 2019 database
has been referred with Emerging Economies, Regional average database values due to unavailability of country specific data.

ASSUMPTIONS
The calculations are made based on the methodology as defined by the PCAF Global GHG Accounting and Reporting
Standard

CLASSIFICATION TYPE EXIOBASE SECTOR CLASSIFICATION

Emission Options Economic Activity Based Emissions

Activity Variable Assets

Country Emerging Economies Emission / Regional Averages

Emission Factor Source/ Year PCAF Database 2019

Inflation Correction for emission factors Year 2022

Currency Exchange Rate 1 Euro / NPR 148.20 as on reporting date of 16th July 2023

PORTFOLIO DETAILS

INDUSTRY EXPOSURE (EURO MILLION) TOTAL PORTFOLIO % COVERED

Energy Projects 87.58 6.80%

Project Finance 128.45 9.97%

Business Loans 754.75 58.59%

Total 970.78 1,288.13 75.36%

As on 16th July 2023, Siddhartha Bank’s Energy portfolio mainly comprising of Hydropower Projects comprised 6.80%, Project
Finance portfolio comprised of 9.97% and Business Loans comprised of 58.59% of its total loan portfolio respectively.

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 DISCLOSURE RESULTS (ABSOLUTE EMISSION EXCEPT RENEWABLE ENERGY)

ASSET CLASS EXPOSURE (EURO SCOPE 1 SCOPE 2 TOTAL EMISSION EMISSION INTENSITY
MILLION) TCO2E TCO2E (TCO2E) (TCO2E/M. EURO)

Project Finance 128.45 39,748.70 2,706.35 42,455.05 330.53

Business Loans 754.75 158,669.69 22,406.09 181,075.79 239.91

Grand Total 883 198,418 25,112 223,531 253

The total GHG Emission from the Project finance portfolio of the Bank totaled to be 42,455.05 tCO2e while the emissions from
the Business Loans Portfolio of the Bank totaled to be 181,075.79 tCO2e making the total GHG Emission for the reporting period
for the assets classes to be 223,531 tCO2e. The emission intensity for Project Finance portfolio and Business Loans portfolio of
the Bank totaled 253.15 tCO2e / Million Euro.

AVOIDED EMISSIONS FROM RENEWABLE ENERGY

SBL has a significant exposure in hydropower sector which is a move towards investment in renewable energy that will
ultimately reduce the use of fossil fuel. These hydropower projects generates electricity that shall replace the use of fossil fuel
resulting in avoidance of emission. Siddhartha Bank’s exposure in hydropower portfolio as a renewable source of energy and
the corresponding avoidance of emission can be reflected as below:

PORTFOLIO AVOIDED EMISSIONS EMISSION INTENSITY

SECTORS
(IN EURO MILLION) (TCO2E) (TCO2E/M. EURO)

Electricity Generation from

87.58 3,798.49 43.37
Hydropower

SCOPE 3 EMISSIONS
Following the PCAF guidelines, the scope 3 emissions are to be separately disclosed from the absolute emissions. For reports
published from 2023 onwards, Scope 3 emissions for the below listed sectors are to be separately disclosed:

 At least Energy (oil & gas) mining

 At least transportation, construction, buildings, materials and industrial activities.

Since, the Bank’s considered portfolio for this disclosure only includes assets classes “Project Finance” and “Business Loans
and Unlisted Equity”, the scope 3 emission for Energy, Mining, Construction and Manufacturing (industrial activities) sectors are
disclosed as below:

INDUSTRY PORTFOLIO (IN EURO MILLION) SCOPE 3 EMISSION TCO2E

Energy (Oil and Gas) 1.77 468.78

Mining 4.23 1,553.16

Construction 22.35 5,987.89

Manufacturing (Cement) 18.88 10,818.29

Manufacturing (Steel) 26.24 13,029.72

Manufacturing (Other) 158.88 1,553.16

Grand Total 33,411

The Bank is currently working on its Disclosure for FY 2023-24 and shall be publishing it in the near future.

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116 REPORT 2023-24
CORPORATE SOCIAL RESPONSIBILITY
Since its inception, the Bank has placed corporate social responsibility at the core of its mission, dedicating itself to fostering
positive change in society. Through sustained efforts in education, healthcare, livelihood enhancement, environmental
conservation, infrastructure development, disaster mitigation, and financial literacy, the Bank has played a pivotal role in
community welfare. To enhance the effectiveness of these efforts, the Bank has introduced a CSR Guideline aligned with
regulatory directives. Governed by its revised Social Responsibility Guideline 2021, the Bank prioritizes impactful, measurable,
and sustainable CSR projects.

PRACTICES RELATING TO SOCIAL RESPONSIBILITY

As a responsible corporate citizen, Siddhartha Bank remains committed to driving positive societal change. The Bank prioritizes
social values that contribute to the well-being of the nation, consistently supporting marginalized communities through
initiatives in healthcare, education, women’s empowerment, art, culture, and financial literacy. Furthermore, the Bank’s efforts
align with the Sustainable Development Goals (SDGs) 2016-2030, addressing several of the 17 SDGs during the fiscal year 2023-
24, as detailed below.

PILLARS OF SUSTAINABLE CONTRIBUTION CONTRIBUTION

AREAS OF INVOLVEMENT
DEVELOPMENT GOALS (IN NPR) %

Goal#3;Good Health and Well Being Health 7,919,806 33%

Education and Financial

Goal#4;Quality Education 11,492,344 48%
Literacy

Goal#5;Gender Equality Gender Equality 125,000 1%

Goal#8;Decent Work and Economic Growth Culture and Tourism 670,880 3%

Goal#11;Sustainable Cities and Communities Environment Cleanliness 2,988,048 12%

Goal#16;Peace Justice and Strong

Infrastructure & Security 459,240 2%
Institutions

Goal#15;Life on Land Afforestation 337,500 1%

Miscellaneous Other 7,800 0%

Total Fund Utilized 24,000,618 100%

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 FINANCIAL LITERACY
Siddhartha Bank is committed to enhancing financial literacy across Nepal. It conducted entrepreneurship training
for 255 women entrepreneurs in Butwal and Nepalgunj. To combat banking fraud, the Bank collaborated with Nepal
Police to produce short films worth NPR 1 million, shared via social media and the Police Partnership Program. The
Bank conducted a financial literacy program for 110 economic journalists and broadcasted awareness content on
Himalayan Television.

Siddhartha Bank’s financial literacy programs empower individuals with essential banking knowledge, helping them
manage savings, loans, and digital transactions effectively. These programs focused on enhancing participants’
knowledge, attitude, skills, and financial behavior, empowering them to make informed financial decisions and
manage their finances effectively.

EDUCATION
The Bank contributed to the education sector by enhancing school
infrastructure, providing educational materials, and supporting teacher
deployment. The Bank donated computers, solar panels, and constructed
facilities at Shri Amarsingh Secondary School. Additionally, the Bank also
funded teacher placements, school reconstructions, desks, benches, and
bio-sand filters for clean water. The Bank also supported underprivileged
students with free uniforms and educational materials, promoted Sanskrit
education, and improved school infrastructure with bicycle parking
spaces. These efforts aim to enhance learning quality, accessibility, and
infrastructure, reflecting the Bank’s commitment to social responsibility
and fostering educational development in Nepal.

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HEALTH
Siddhartha Bank has actively contributed to Nepal’s healthcare sector
through various initiatives. It pledged NPR 10 million to Kathmandu Institute
of Child Health’s pediatric hospital, disbursing NPR 2 million so far. The
Bank donated eight patient monitors worth NPR 1.636 million to Siddhartha
Children’s and Women’s Hospital and an operation theater table worth NPR
1.299 million to Pokhara University Teaching Hospital.

On the occasion of 21st Bank’s anniversary, the Bank organized nationwide

blood donation drives with 598 participants. The Bank funded NPR 500,000
for cataract surgeries, NPR 300,000 for beds in Morang Prison, NPR 200,000
for a cancer screening center, and NPR 200,000 for a free health camp
benefiting over 800 individuals. Additional support included a token
issuance machine for Rapti Academy of Health Sciences and a mental
health awareness camp. Through these contributions, Siddhartha Bank
continues to enhance healthcare accessibility across Nepal.

ENVIRONMENT
Siddhartha Bank has taken various initiatives to support
environmental sustainability across Nepal. On World Environment
Day, the Bank organized several programs, including cleanliness
campaigns, observing No Print Day, waste management seminars,
and distribution of small plants across its branches in all seven
provinces. These activities aimed to promote environmental
awareness and a cleaner environment. The Bank also supported
Khajura Rural Municipality for purchasing tree guards for a large-
scale tree plantation campaign.

Similarly, for Earth Day, the Bank organized environmental cleaning

and art events, to raise awareness regarding the importance of
environmental conservation. In Sarlahi, the Bank helped agricultural
families by providing spray tanks worth NPR 105,000, contributing to
improved crop production and economic growth in the region.

OTHERS
In the wake of the devastating earthquake in Jajarkot and Rukum,
Siddhartha Bank provided timely support to affected families. As part of its
corporate social responsibility, the Bank donated relief packages worth NPR
1,493,749.54, benefiting 450 families in need.

The aid was delivered in coordination with the District Disaster

Management Committee, Rukum, ensuring effective distribution. Each
package contained essential food items like rice, lentils, salt, oil, and spices,
helping meet immediate needs.

This effort reflects Siddhartha Bank’s ongoing commitment to stand with

communities during crises—offering not just aid, but also hope, solidarity,
and compassion when it matters most.

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 BUSINESS ETHICS AND ANTI-CORRUPTION MEASURES

The Bank aims to create a transparent and open work As an organization committed to the prevention of Bribery
culture in the organization. It is the responsibility of an and Corrupt-Practices, the Bank:
organization to protect it from financial and reputational
harm and ensure that it operates in an ethical and socially  Prohibits officials engage in any type of bribery and
responsible manner. The anti-Bribery & Anti & Corruption corrupt practice.
policy of the Siddhartha Bank Limited is a set of benchmarks  Prohibits employees to offer, promise, accept, influence
for the supervision of systems and procedures, controls, any type of gifts or facilities or things or services or acts
training, and other related matters in the implementation of as described by the Policy to or from third parties or
the Anti-Bribery & Anti & Corruption practices in the Bank. The customers or any other person for impartment of their
Bank is committed to operating with transparency, trust, and duties.
integrity and applies a zero-tolerance approach to bribery
and corrupt practices in its entire process of operational  Prohibits officials to offer, promise or provide anything
and business functions. Any form of bribery and corrupt as restricted by the Policy to any public official or third
practice is unacceptable and strictly prohibited. parties or customer to influence them or obtain business
or personal benefits.

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120 REPORT 2023-24
 Prohibits third parties and customers to offer anything as in order to influence and obtain business or personal
restricted by the policy to officials of the Bank to impress benefits.
or influence to get any banking or other services from the
Bank.  Prohibits employees from conducting or directly or
indirectly being involved to different types of fraudulent
 Prohibits officials from carrying any kind of unethical or activities such as forgery of documents, embezzlement,
unfair practice or favoring or manipulation in the process intentional misreporting of positions, misappropriation of
of recruitment, promotion or professional development of asset, theft etc.
employees and must assure competency-based human
resources procedures and processes for recruitment,  Apply fair process in the selection and appointment of
promotion and professional development. suppliers/vendors/business partners/contractors or any
other persons for the services of the Bank abiding by due
 Prohibits employees from, directly or indirectly offering, process set out by prevalent laws, regulatory directives
promising or transferring anything to a public official and internal rules as applicable.

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 CUSTOMER SERVICES & GRIEVANCE REDRESSAL MECHANISM
Siddhartha Bank Limited (SBL) recognizes that customer seven working days. In cases requiring higher-level attention,
satisfaction is a key driver of business success in today’s the Chief Executive Officer (CEO) reviews serious grievances
competitive banking environment. To maintain its reputation and conducts periodic evaluations to enhance service quality
and build trust, the Bank actively promotes ethical and resolve the issue with utmost priority. If customers remain
interactions with customers and vendors while ensuring dissatisfied, they can escalate their concerns to the Financial
transparency in all banking affairs. Through proactive Consumer Protection Unit of Nepal Rastra Bank (NRB) for final
stakeholder engagement and a strong grievance redressal resolution the access portal to which is also available in the
mechanism, SBL is committed to delivering high-quality Bank’s website.
services and safeguarding its reputation.
SBL ensures timely resolution of complaints while keeping
SBL has established a Central Information and Grievance customers informed throughout the process. The Bank
Handling Desk (CIGHD) under Central Operations to address maintains detailed records to track trends, improve services,
customer concerns efficiently. This unit is responsible for and comply with regulatory requirements. Additionally, all
monitoring, controlling, and reporting reputation-related branches and the Head Office display essential grievance
risks while handling customer complaints and grievances. redressal information, including escalation contacts for
Bank has developed various system/process to register CGHO and NRB. Beyond customer grievances, SBL also values
complaints through multiple channels, including telephone, employee concerns. A whistleblowing portal allows staff
mobile, email, branch visits, the Bank’s website, contact to report grievances confidentially, reinforcing a safe and
center, BankSmart XP, and social media platforms such as professional work environment.
Facebook, X , and LinkedIn. Additionally, suggestion boxes and
QR-based feedback systems are available at branches to Offering multiple complaint registration channels, enforcing
encourage customer for valuable suggestion. clear resolution timelines, and maintaining transparency,
Siddhartha Bank Limited ensures fair and efficient grievance
The grievance redressal mechanism follows a structured, handling. This commitment strengthens customer trust,
multi-tiered approach. At the first level, branch-based enhances its reputation, and drives continuous improvement
Grievance Handling Officers address complaints within two in service quality, ensuring long-term business sustainability.
working days. If unresolved, the issue is escalated to the
Grievance Handling Desk at the Head Office, which aims During the fiscal year 2023-24, total grievance received from
for resolution within five working days. If further intervention customer through different medium were addressed by the
is required, the matter is forwarded to the Chief Grievance Bank:
Handling Officer (CGHO), who ensures a resolution within

DESCRIPTION NO OF REGISTERED NUMBER OF RESOLVED NUMBER OF PENDING

COMPLAINTS COMPLAINTS COMPLAINTS
Technical Glitches Related Complaints 4 4 -

Financial Crime Related Complaints 3 3 -

Financial Loan Related Complaints 4 4 -

Interest Rate Related Complaints 2 2 -

Service Quality Related Complaints 55 55 -

Employee Behavior Related Complaints 20 20 -

Physical Infrastructure Related 2 2 -

Complaints

Others 34 34 -

Total 124 124 -

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INFORMATION/DISCLOSURE ON ISO CERTIFICATION
As of the fiscal year 2023-24, the Bank does not hold any ISO core banking software, along with NAS backup solutions
certification. However, as part of its five-year strategic plan, and power redundancy systems, ensures operational
the Bank aims to obtain ISO 27001 certification within the resilience. However, the audit identified the need for regular
fiscal year 2024-25. This certification will further strengthen Vulnerability Assessment and Penetration Testing (VAPT) to
the Bank’s information security governance, ensuring address potential security gaps.
compliance with global best practices for managing
information security risks. The Bank remains committed to VULNERABILITY ASSESSMENT AND
enhancing its cybersecurity framework by aligning with PENETRATION TESTING (VAPT)
international standards to safeguard its digital assets and The VAPT exercise revealed vulnerabilities across external
maintain the highest level of data protection. and internal infrastructure, including critical issues
such as Glassfish Path Traversal, Weak SSH Passwords,
During Fiscal Year 2023-24 Bank conduced the Information and Unauthorized Access to APIs. The findings were
System Audits in alignment with ISO/IEC 27001 standards, categorized based on the CVSS v3.1 scoring system, with
NRB IT Guidelines and ISACA ITAF Frameworks, ensuring detailed recommendations provided to mitigate risks. Key
compliance with regulatory requirements, and industry best recommendations include:
practice. The audit focused on three critical elements People,
Process, and Technology to evaluate the effectiveness of our  Implementing strong password policies and multi-factor
IT controls and identify areas for improvement. authentication.

 Regularly updating systems with the latest security

KEY FINDING AND OBSERVATIONS
patches.

PEOPLE  Adopting secure coding practices and hardening modern

The Bank has a well-structured team with qualified technologies like Docker, GitLab, and Kubernetes.
professionals who undergo regular training programs,  Conducting periodic security assessments and breach
including cybersecurity awareness, phishing simulations, and assessments to identify potential threats.
social engineering prevention. However, the audit highlighted
the need for consistent documentation practices,
CONTINUOUS IMPROVEMENT AND SUSTAINABILITY
particularly in maintaining KYE (Know Your Employee)
 SBL is committed to continuous improvement in its IT
records and ensuring all employees sign Non-Disclosure
governance and cybersecurity practices. The Bank will
Agreements (NDAs).
address the audit recommendations by:

PROCESS  Regularly updating Information Security Policies.

SBL has established a comprehensive set of policies,  Enhancing continuous monitoring and incident
Standard Operating Procedures (SOPs), and frameworks management capabilities.
to govern IT operations. These documents are regularly
reviewed and updated to align with industry standards  Conducting periodic IS Audits and VAPT exercises to
and regulatory requirements. The audit recommended ensure a robust security posture.
enhancing the labeling and classification of documents to
ensure better confidentiality and compliance. CONCLUSION
The IS Audit and VAPT findings highlights the Bank’s
TECHNOLOGY commitment to safeguarding customer data and ensuring
The Bank employs advanced technological solutions, operational resilience. While most controls were found
including firewalls, antivirus software, Multi-Factor to be effective, the audit highlighted areas for further
Authentication (MFA), VPN tunneling, and Privileged strengthening, particularly in system access security and
Access Management (PAM). The use of Finacle as the documentation practices. SBL’s management and IT team
are diligently working to implement the recommended
improvements, ensuring the Bank remains at the forefront
of technological advancement and cybersecurity in Nepal’s
banking sector.

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RISK MANAGEMENT
REPORT

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 MESSAGE FROM THE
CHIEF INTEGRATED RISK OFFICER

Dear Stakeholders,

The past fiscal year has been marked by significant challenges in the
financial landscape, both domestically and globally. Despite these
headwinds, Siddhartha Bank has remained resilient, leveraging strategic
risk management practices to navigate uncertainties and safeguard the
interests of our stakeholders.

The financial environment witnessed a notable slowdown in credit expansion,

with credit growth reaching 6.1% against a target of 11.5%, while deposit growth
surged to 13.3%. This divergence, coupled with declining interbank and base
rates, has placed pressure on the Banking sector. The moderate GDP growth
of 3.54% was further impacted by a contraction in the manufacturing and
construction sectors, which declined from 13.10% to 12.53%. These factors,
along with a sharp rise in Non-Performing Assets (NPAs) and blacklisted loan
customers, have underscored the need for robust credit risk management and capital planning. In addition to financial
risks, cybersecurity threats have escalated dramatically, with a 119% increase in registered cybercrime cases.

Further, Siddhartha Bank is committed to sustainability by integrating responsible banking practices, promoting
financial inclusion, and supporting green initiatives while recognizing climate change as a major risk and prioritizing
strategies to mitigate its impact for long-term resilience.

To address these challenges, Siddhartha Bank has adopted a comprehensive Five-Year Risk Management Strategy,
focusing on:
 Strengthening Risk Management Functions: Through robust policies, IT security, and compliance frameworks.

 Building a Strong Risk and Compliance Culture: By conducting regular training and stakeholder engagement
programs.

 Identifying and Mitigating Material Risks: Through branch risk grading, internal audits, and key risk indicator
monitoring.

 Ensuring Efficient Capital Planning: To meet evolving regulatory requirements, including the 0.5% countercyclical
buffer.

 Embracing Digital Risk Management Practices: Including dynamic MIS, fraud Risk Management applications, and AML
system upgrades.

 Upholding Corporate Governance: Monitoring risk appetite and ensuring adherence to risk limits.

 Integrating ESG Principles: Through green policies, financial literacy programs, and data privacy measures.

 Enhancing Business Continuity Preparedness: To strengthen resilience across the organization.

In the fiscal year 2023-24, we achieved significant milestones, including:

 Becoming a signatory of the Partnership for Carbon Accounting Financials (PCAF) and successfully disclosing
Greenhouse Gas (GHG) emissions for financed investments.

 Increasing our climate finance portfolio by financing Electric Vehicles, achieving a reduction of 914.2 tCO2e/year in
GHG emissions.

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126 REPORT 2023-24
 Implementation of capital based pricing model.

 Prioritized the digitization of manual processes, strengthened our digital platforms, and implemented advanced security
measures to protect sensitive data and ensure operational resilience.

 Strengthening cybersecurity measures through advanced threat monitoring systems, multi-factor authentication, and
regular IT audits.

 Strengthened credit risk management through regular stress testing and portfolio reviews, ensuring proactive monitoring
of high-risk exposures.

 Selection of Vendor for implementation of fraud Risk Management Application.

Looking ahead, our strategic initiatives will focus on:

 Automation and Digitization: Transitioning manual processes to automated systems to enhance efficiency and accuracy.

 Monitoring Distressed Sectors: Conducting regular credit risk reviews to manage exposure in stressed industries.

 Capital and Risk-Weighted Asset Management: Ensuring effective monitoring of capital adequacy and provisions for high-
risk exposures.

 Stress Testing and Portfolio Review: Strengthening the Bank’s resilience to financial and economic stressors through periodic
assessments.

At Siddhartha Bank, we remain committed to robust risk management, digital transformation, and regulatory compliance.
Our strategic initiatives are designed to enhance financial stability, mitigate emerging risks, and ensure sustainable growth.
As we move forward, we will continue to adapt to dynamic economic conditions, uphold strong governance practices, and
safeguard the interests of all our stakeholders.

Thank you for your continued trust and support.

Shailaja Gyawali
Chief Integrated Risk Officer
Siddhartha Bank

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RISK MANAGEMENT

CREDIT RISK OPERATION RISK MARKET RISK LIQUIDITY RISK COMPLIANCE & LEGAL RISK

AML/CFT RISK INFORMATION REPUTATION RISK STRATEGIC RISK ENVIRONMENT &

TECHNOLOGY RISK SOCIAL RISK

Siddhartha Bank’s risk management framework is built RISK MANAGEMENT STRATEGIES

on a robust governance structure, ensuring resilience, Monitor the risks inherent in the business activities and
sustainability, and alignment with strategic objectives. The ensure their exposures are in line with the Board approved
Integrated Risk Department plays a pivotal role in overseeing limits, risk appetite, risk limits, and corresponding capital or
a comprehensive range of risks, including credit, operational, liquidity needs
market, liquidity, compliance, information technology,
reputational, strategic, and environmental risks. Guided by  Ensure internal control, risk management system, and
a multi-tiered governance model, the Board of Directors corporate governance
delegates authority to specialized committees, such as the across all levels, functions and activities of the Bank are in
Risk Management Committee and the AML/CFT Committee, place
to ensure thorough oversight and accountability. The
Bank employs a three-lines-of-defense model, fostering  Ensure compliance with central bank regulations, other
a proactive risk culture where every staff member is regulations, and the Bank’s policies, and standard
accountable for managing risks. Advanced digital tools, such operating procedures at all times
as the Operational Risk Management Application enhance
risk monitoring and control, while regular stress testing and  Develop risk assessment and measurement systems
risk assessments ensure preparedness for adverse scenarios.
 Strengthen the risk management framework, and the risk
The Bank’s risk management strategy emphasizes a holistic functions and take actions on risk management
approach, recognizing the interconnected nature of risks.
Key initiatives include the development of measurable  Guide and support departments through awareness
Key Risk Indicators (KRIs), regular policy revisions, and programs/ activities training at
the implementation of early warning systems for credit different levels for a better understanding of risk
portfolios. The IRD ensures compliance with regulatory management and its implementation.
requirements, maintains a conservative risk appetite, and
aligns risk management practices with the Bank’s capital  Implement policies, practices and other control
strategy. Looking ahead, the Bank plans to further enhance mechanisms to manage risks effectively;
its risk framework by integrating advanced risk assessment
tools, strengthening business continuity plans, and fostering  Communicate risk to Senior Management, Risk
a culture of compliance and risk awareness. These efforts Management Committee and the Board for informed
underscore Siddhartha Bank’s commitment to safeguarding decision making.
stakeholder interests, ensuring sustainable growth, and
maintaining operational resilience in a dynamic financial
landscape.

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REPORT 2023-24
 RISK MANAGEMENT UNITS OF THE BANK

RISK MANAGEMENT UNIT PRIMARY ROLES AND RESPONSIBILITY

Manage Potential for loss due to failure of counterparty to meet its obligations to
Credit Risk Management
pay the Bank per agreed terms

Manage potential for direct or indirect losses or damaged reputation arising from
Operation Risk Management
adequate or failed processes, people, systems, and the impact of external events.

Manage the risk of loss in earnings and capital movement due to adverse
Market Risk Management
movement of interest rates, foreign exchange, and market prices.

Manage the risk of adverse movement in the liquidity position of the Bank resulting
Liquidity Risk Management
in loss and/or inability to solicit deposits

Manage non-compliance to regulatory requirements and fines /penalties

Compliance Risk Management
thereafter

Anti –Money Laundering/Combating

Manage potential threats from suspects to abuse the system to legitimize their
the financial terrorism Risk
money
Management

Information Security Risk

Manage information technology-related risk
Management

Manage the potential for damage to the environment and ecosystem through
Environmental and Social Risk
business activities to cause an adverse impact such as damage, injury, or loss to
Management
people and communities

RISK MANAGEMENT FRAMEWORK

The Bank’s Risk Management Framework (as demonstrated in figure below), articulates holistic agenda for ensuring an
effective and inclusive risk control throughout the Bank.

BANK’S RISK MANAGEMENT PROCEDURE

BANK BUSINESS STRATEGY AND

OBJECTIVES

Policy Framework and Accountabilities

Risk Assessment Risk Treatment

Risk Risk Risk Risk Monitoring

Identification Analysis Control and Review

Risk Reporting

Action Plans & Tracking

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130 REPORT 2023-24
COMPONENTS OF RISK MANAGEMENT AT SIDDHARTHA BANK a defined control environment and bear full responsibility for
Embedding a sound risk management culture has been one the risks that arise in their operations.
of the core objectives of the Bank, which underpins the Bank’s
ability to identify, assess, discuss and take actions to address SECOND LINE OF DEFENSE - INDEPENDENT RISK CONTROL AND
existing and emerging risks. To align with its strategic COMPLIANCE
priorities, good governance and internal control and to Integrated Risk Management Department and Compliance
remain resilient, the Bank’s risk management framework has Department as a second line of defense confirms all the
covered the following components: business activities are conducted in controlled environment.
They develop and review policies and procedures, design
 Risk Governance frameworks, apply various tools and processes to identify
and mitigate risk and establish risk appetite.
 Risk Appetite

 Risk Management Procedure THIRD LINE OF DEFENSE - INDEPENDENT AUDIT FUNCTION

The third line of defense is the Internal Audit Department
which provides independent assurance of oversight of
RISK GOVERNANCE FRAMEWORK (THREE LEVEL STRUCTURE)
the robustness of risk management function including
The material risks and uncertainties that the Bank faces
effectiveness of management’s control of its own business
throughout its business and portfolios are critical focus
activities (the first line) and of the processes maintained by
areas of the management. Considering the risks inherent
the risk controllers (the second line). Further, statutory audit
in the Banking business, the Bank has adopted three
and regulatory audit shall also form third line of defense of
lines of defense risk governance model that helps it to
the Bank.
comprehensively address risks on an ongoing basis.

As a result of our three lines of defense model, we are able

FIRST LINE OF DEFENSE- RISK MANAGEMENT BY BUSINESS/ SUPPORT to not only prioritize risk management, but also establish and
UNITS
nurture a ‘risk-aware’ culture across the Bank, which helps to
Main business functions and support units of the Bank are
ensure the Bank’s long-term sustainability.
considered as first line of defense and hold ownership of the
risk. They ensure all the business activities are conducted in

BANK’S THREE LEVEL STRUCTURE

THIRD LINE
SUPERVISORY LEVEL THIRD LINE

 Risk Management Committee

 AML/CFT Committee  Internal Audit

BOARD
 Audit Committee

 Employee Service & Facilities

Committee (HR Committee)

Governing Body: Integrity, Leadership & Transparency

SECOND LINE

EXECUTIVE LEVEL
 Integrated Risk

 Chief Executive Officer  Record Disposal Committee

 Executive Committee  Financial Direction Committee
 Asset Liability Management  Procurement Committee
Committee
 Loan Recovery Committee
CHIEF  Management Credit Committee
 Loan Write off Sub Committee
EXECUTIVE  Operation Risk Management
 Recruitment Committee FIRST LINE
OFFICER Committee
 BCP Management Committee  Assets Disposal Committee
 Business Line
 BCP Implementation Committee  Digital Strategy Evaluation and Monitoring
Committee  Support Line
 Grievance Handling Committee

Active to achieve organizational objective

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REPORT 2023-24
 THE BANK’S RISK GOVERNANCE STRUCTURE

BOARD OF
DIRECTORS

RISK MANAGEMENT
CHIEF EXECUTIVE AML/CFT COMMITTEE
ALCO COMMITTEE OF THE
OFFICER OF THE BOARD
BOARD

OPERATIONS RISK
CHIEF INTEGRATED FOR ADMINISTRATIVE
MANAGEMENT
RISK PURPOSE
COMMITTEE

HEAD MANAGER
HEAD CREDIT HEAD MARKET HEAD COMPLIANCE HEAD
OPERATION INFORMATION
RISK RISK AND GOVERNANCE AML/CFT
RISK SECURITY

ENVIRONMENTAL &
AML/CFT
SOCIAL RISK MIDDLE OFFICE
UNIT
MANAGEMENT

USER MANAGEMENT INFORMATION

UNIT SECURITY UNIT

RISK APPETITE
Risk appetite is the aggregate level and types of risk that  Guidelines and SOPs: Standard Operating Procedures
the Bank is willing to assume, or seeks to avoid, in pursuit (SOPs) and guidelines provide directions for implementing
of its goals, objectives, and operating plan, consistent with policies. SOPs are reviewed periodically and adjusted
applicable capital, liquidity, and other requirements. The Bank based on market conditions or regulatory changes.
ensures that its risk-taking activities align with its strategic
objectives and operational capabilities, while maintaining  Processes and Standards: The Bank follows structured
control over potential risks through rigorous monitoring of processes for identifying, evaluating, documenting, and
tolerance levels. The risk appetite is evaluated periodically controlling risks. Standards ensure the quality of analysis
and communicated throughout the Bank. The Risk and decision-making. Key processes include the review
Committee, in consultation with the Board, develops the risk and approval of new products, models, and stress testing.
appetite and executes the strategic, capital, and operating
plans within the risk appetite and established limits.  Measurement, Monitoring, and Reporting: Risk
measurement employs models and stress testing to
RISK MANAGEMENT PROCEDURE estimate exposures, credit risk parameters, and capital
The Bank’s risk management framework is integrated with its requirements. Regular monitoring ensures activities
strategic and business planning processes, guided by poli- remain within approved limits, with breaches reported
cies, limits, and industry best practices. Key risk management to senior management. Risk reports provide aggregate
techniques include: measures of risk across portfolios, aiding senior
management and the Board in understanding the Bank’s
 Policies and Limits: The Bank’s risk-related policies risk profile and portfolio performance.
address specific risk types, guided by its risk framework
and appetite. These policies set limits and controls for risk-
taking activities, ensuring accountability and alignment
with Board-approved tolerances.

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RISK CULTURE
Siddhartha Bank fosters a robust risk culture through its three-lines-of-defense model, emphasizing ethical business
practices, proactive risk management, and transparent decision-making. The Board and Senior Management lead by
example, promoting risk awareness and accountability across all levels of the organization. Business units are empowered
to manage risks within the established risk framework, supported by the Risk Department’s assessment methods, standards,
and practices. This strong risk culture is reinforced through dedicated training, workshops, and digital tools like the Operational
Risk Management Application and Customer Profiling and Fraud Detection System, enabling staff to identify, monitor, and
mitigate risks effectively. Values and ethics are further upheld through policies, whistleblowing platforms, and a commitment
to compliance and sustainable growth, ensuring the Bank remains resilient and aligned with its strategic objectives.

DEFINED KEY
ROLES,
RISK RESPONSIBILITIES RISK
MANAGEMENT & AUTHORITY MANAGEMENT
FRAMEWORK INFRASTRUCTURE

SUSTAINED
TRAINING & TRANSPARENCY &
DEVELOPMENT VISIBILITY IN BANK’S
PROGRAMS PRACTICES

WHISTLE REGULAR RISK

BLOWING ASSESSMENT &
MECHANISM CORRECTIVE
ACTION

RISK
CULTURE

RISK CONTROL AND MITIGATION METHODOLOGY

Considering the importance of effective risk management consequences of an unfavorable event and the likelihood of
and control systems in banks, the Bank has developed such an event occurring.
strategies for managing each risk element faced by the Bank
as a part of the overall strategy for an evolving and efficient Risk evaluation assists in making decisions, based upon the
risk management system. outcomes of risk analysis, about which risks need treatment
for implementation.
The Bank’s risk management framework and control
measures aim to strike the appropriate balance between After the assessment of exposed risk, risk treatment is
our regulatory requirements, which demonstrate our concerned with the selection of the best option to eliminate
ability to sustain financial stress and unexpected losses, or mitigate unacceptable risks.
and our shareholders’ return expectations. The Bank’s
risk management is a discipline that encompasses all CREDIT RISK
the activities that affect its risk profile which involves In relation to the Bank’s lending, investment and other
identification, measurement, monitoring, and controlling risks. contractual commitments, credit risk is the risk that results
from the borrowers or counterparties’ failure to fulfill their
Risk assessment comprises three steps risk identification, obligations under contractual agreements.
risk analysis, and risk evaluation. Identification of the nature,
sources, cost of risk, and areas of impact, events, their The transactional/ borrower level and the portfolio level
causes, and their potential consequences from both existing risk analysis make up the integral part of the Bank’s Credit
and new business initiatives is essential to properly manage risk management system. The Bank has developed strong
risks. procedures, processes, and tools to identify and assess the
risks on an individual borrower basis in order to manage
Risk analysis involves developing an understanding credit risk on the transaction level.
of the Bank’s risk by considering factors affecting and

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REPORT 2023-24
 Some of the key aspects of Credit Risk Management System of the Bank are:

CREDIT CREDIT LOAN LOAN MONITORING

ANALYSIS SCORING COVENANTS DIVERSIFI- COLLATERAL AND
CATION REPORTING

g Assessment of Credit g Assignment of credit g Certain conditions and g Diversification of loan g Maintenance of certain g Monitoring of portfolios
worthiness of the score to borrowers based covenants are required to portfolio to different margin in terms of of the Bank in terms of
borrower on their credit history, be qualified for the loan borrowers, sectors and primary collateral and individual borrowers,
financial status, security g Includes maintenance products secondary collateral Single Obligor Limit,
g
Review of borrower’s collateral, etc. of certain level financial sectors and products.
repayment capacity, g Guided by Credit Risk g Guided by Collateral
performance, providing
financial statements, g Evaluation of risk of Concentration Policy of Management Policy of g Guided by NRB
regular financial reporting
credit history, etc. guided lending to borrowers the Bank the Bank Directives and Credit
or limiting the amount
by NRB Unified Directive, guided by Internal Risk Concentration
of additional debt the
Credit Related Policy, Risk Rating Policy and Management Policy of
borrower can take on,
Product Papers, etc. of Procedures of the Bank the Bank
etc.
the Bank.
g Guided by NRB Unified
Directive, Credit Related
Policy, Product Papers,
etc. of the Bank.

CREDIT RISK MANAGEMENT SYSTEM AT BORROWER/ TRANSACTION LEVEL

CUSTOMER DOCUMENTS

RELATIONSHIP TEAM DOCUMENT PROCESSING

FURTHER CLARIFICATION CREDIT FACILITY APPLICATION

RISK ASSESSMENT
(CRD)

REJECTION APPROVING AUTHORITY APPROVAL

OFFER LETTER

SECURITY DOCUMENTATION

ADMINISTRATION/ DISBURSEMENT CHECK LIST

MONITORING

RECOVERY CREDIT ADMINISTRATION FUNCTION

REVIEW/ CALL BACK

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CREDIT RISK CONCERN AND MITIGATION PLAN

Systematic and targeted

framework for credit CREDIT
POLICY
decision-making

Counterparty exposure
COUNTERPARTY monitored and limit breaches
LIMITS require escalation

INDIVIDUAL
Based on transaction amount, borrower’s CREDIT
aggregate facilities, credit risk ratings and ASSESSMENT
nature and terms of risk & SANCTION

Regulates economic sectors, industries

CONCENTRATION and product lines to align with risk
RISK appetite and threshold

Simulation of outcomes STRESS

and calculation of TESTING &
associated impact
SCENARIO
ANALYSIS

RISK Tracking credit performance trends, evaluating the

ASSURANCE & adequacy of credit risk infrastructure and assessing
OVERSIGHT governance process

Standardized RISK
risk-based BASED
pricing system PRICING

OPERATIONAL RISK
Operational risk, defined as the risk of loss from inadequate or failed internal processes, people, systems, or external events,
is inherent in all banking activities. The Bank is committed to minimizing this risk by reducing manual processes, enhancing
transparency, and proactively managing risks through a robust framework that includes Key Risk Indicators (KRIs), control
indicators, and comprehensive reporting standards. The Operations Risk Department oversees these efforts, supported by
the Operational Risk Management Committee and the Board-level Risk Management Committee, which review protocols and
results to ensure evidence-based decision-making and accountability. Risks are identified through measurable KRIs, internal
control failures, reported risk events, and external impacts, with a focus on breaches of tolerance limits, material risks, and
audit or regulatory recommendations. Regular assessments ensure risks are evaluated and mitigated, with capital allocated
in line with Basel provisions to cover potential exposures.

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REPORT 2023-24
 The Bank monitors operational risks through regular reporting to the Operational Risk Management Committee, Risk
Management Committee, and the Board. Reports evaluate the effectiveness of internal controls, compliance with policies and
SOPs, user authorities, security measures, and staff conduct. Key areas include overall risk exposure, the quality of mitigating
actions, and the adequacy of controls to address issues before escalation. By adopting a coordinated approach across risk
disciplines, the Bank strengthens its operational risk management practices, safeguarding against evolving challenges such
as IT failures, cyber threats, and regulatory changes.

RISK MITIGATION AND MONITORING

RISK DESCRIPTION KEY RISK RISK ASSESSMENT RISK MITIGATION AND MONITORING

 Internal/External  Key Risk Indicators  Capital Allocation in line with Capital

Fraud Adequacy Framework 2015
 Risk & Control Self-
 Control Lapses in Assessment  Tolerance Monitoring, Reporting and
Operational Process Escalation
 Workshop/ Training
 Breakdown  Monitoring of major operational risk
 Whistle Blowing
in Corporate indicators vide Key Risk Indicators, Key
Governance  Onsite Assessment control parameters
Operational Risk of Branches/
 Digital Adoption Risk  Review of controls and their
Department
effectiveness considering the nature of
 External Events Risk
 Review of Internal business.
Audit/External Audit

 Risk Register

 Digital Risk
Evaluation

MARKET RISK
Market risk refers to the potential impact on the Bank’s open positions daily and calculates risk exposure to allocate
earnings and capital due to changes in interest rates, sufficient capital in line with Basel provisions. Advanced
securities prices, foreign exchange rates, commodity prices, dealing platforms and real-time global market information
and equity prices, as well as the volatility of these changes. systems enable the Treasury front office to manage
The Bank manages market risk through a comprehensive liquidity and market positions effectively. The Market Risk
framework that includes interest rate risk, foreign exchange Management Department, or middle office, is responsible for
risk, position risk, commodity price risk, and concentration identifying, measuring, monitoring, and controlling market
risk. To mitigate these risks, the Bank has established clear risks, ensuring independent risk assessment and reporting.
limits and guidelines outlined in its market-related policies
and internal circulars. The Market Risk Management Unit, The Bank’s Market Risk Management Policy and Framework
supported by the Treasury Mid Office, prepares daily, weekly, provide a structured approach to managing market risks,
and monthly reports to monitor current market conditions incorporating practices such as GAP analysis for interest
and predict future scenarios. Stress testing, using both rate risk, monitoring foreign currency exposures, and setting
regulatory-approved and internally developed models, is counterparty exposure limits. The framework also includes
conducted to assess the Bank’s ability to withstand adverse predefined market deal limits for the CEO and ALCO, ensuring
market conditions. adherence to risk thresholds. Additionally, the Bank follows
a Liquidity Contingency Plan and Deposit Management
The Asset Liability Management Committee (ALCO) plays a Policy to maintain liquidity buffers and diversify its deposit
pivotal role in overseeing market risk management. ALCO portfolio. These measures, combined with a proactive risk
regularly reviews interest rate movements, exchange rate management strategy, ensure the Bank’s financial stability
fluctuations, and equity price changes, ensuring alignment and compliance with regulatory requirements, safeguarding
with the Bank’s policies and procedures. The Bank assesses against market volatility and adverse economic conditions.

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RISK MITIGATION AND MONITORING

RISK DESCRIPTION KEY RISK RISK ASSESSMENT RISK MITIGATION AND MONITORING

 Mismatch in interest rate  GAP Analysis  Capital Allocation in line with

sensitive assets and liabilities Capital Adequacy Framework
 Mark to Market Analysis
2015
 Uncovered FCY Open Position
 Financial Ratio Analysis
 Trigger Reporting and
 Sharp stock price decline and
 Structural liquidity Escalation
rising debt costs
assessment
 Setting the risk appetite of
 Growing concentrations in
 Deposit Composition the Bank
either assets or liabilities
Market Risk
 Nostro Reconciliation  Assigning market dealing
 Rapid assets growth funded by
and portfolio limits and credit
volatile large deposit  Open Position Approach
exposure limits through
 Large size of Off-balance sheet  Stress Testing approved policies
exposure

 Adverse movement in
Economic and Market
conditions

STRATEGIC RISK
Strategic risk refers to the potential for financial loss or adverse effects on the Bank’s capital and performance due to the
pursuit of an unsuccessful business plan. It may arise from poor decision-making, ineffective execution, inadequate resource
allocation, regulatory changes, or an inability to adapt to shifts in the business environment. Additionally, the absence or
inadequate implementation of appropriate policies and strategies can contribute to strategic risk, potentially leading to
operational losses that impact the Bank’s capital base.

RISK MITIGATION AND MONITORING

The Bank approve five-year strategy through its Corporate Strategy and ensures a robust process for identifying, measuring,
monitoring, and controlling strategic risk. This includes conducting an annual strategic risk review, comparing the Bank’s
financial performance quarterly to industry standards, and aligning with the ongoing business plan. Departments within the
Bank review their budgets and business plans, conducting gap analyses to validate predefined objectives periodically and
report to senior management and board in regular interval for any changes as per external environment factor and status of
achievement.

REPUTATION RISK
Reputation risk is the potential for financial loss or damage to the Bank’s earnings and capital due to negative publicity,
whether justified or not. It may arise from poor earnings, regulatory actions, fraud, litigation, or failure to deliver services or
products, leading to a decline in customer trust, costly legal consequences, or reduced revenue. This risk exists across the
organization and can result from inappropriate actions, lack of governance oversight, or stakeholder dissatisfaction, ultimately
impacting the Bank’s credibility and business sustainability.

RISK MITIGATION AND MONITORING

Bank implemented a structured approach ensures proactive reputation risk management, timely resolution of issues, and
continuous monitoring to maintain stakeholder trust.

 Reputational Awareness & Decision-Making – Business functions consider reputation impact in decision-making,
ensuring proactive stakeholder engagement and transparency.

 Centralized Grievance Handling (CIGHD) – A dedicated unit manages customer complaints and grievances through
multiple digital and physical channels, ensuring timely resolution.

 Senior-Level Oversight & Branch Support – Senior executives oversee grievance handling, while designated officers at the
branch level manage customer issue and complain.

 Structured Grievance Resolution – Standardized procedures and a digital CRM platform ensure systematic and timely
complaint handling.

 Operational Safeguards & Risk Monitoring – Clear policies, job roles, and periodic risk assessments help mitigate
operational risks affecting the Bank’s reputation.

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 COMPLIANCE RISK MONEY LAUNDERING/ TERRORIST FINANCING RISK
Compliance Risk is associated with the risk of legal or The Bank has implemented sound mechanisms in place so
regulatory sanctions, material financial loss, or loss to as to ensure that it prevents risks associated with money
reputation the Bank may suffer as a result of its failure to laundering and terrorist financing.
comply with laws, regulations, rules, related organization’s
standards, and codes of business conduct applicable to its RISK MITIGATIONS AND MONITORING
banking activities. The Siddhartha Bank has board approved  Implemented risk management system for proper
“Compliance Policy” devised to ensure a proper compliance Identification and analysis of ML/FT risks related to risk
orientation and focus within the Bank to address compliance factor such as customer, product & service, delivery
risk inherent in banking business operations. channel & geography, and effective implementation of
the Bank’s policies and procedures that commensurate
The Bank has establish procedures on controlling with the relevant inherent and residual risks identified.
compliance risk, responsibilities and compliance review
periodically by establishing comprehensive identification  Board level AML/CFT Committee ensures the oversight of
and measurement procedures for all functional activities at AML Governance within the Bank.
Head office and Branches through various exhibits ,checklist
and offsite report. The Bank has establish the Compliance &  AML/CFT Department screens, monitors and reports the
Corporate Governance Department under the Integrated issues related to AML/CFT and develop AML compliance
Risk Department (IRD) which acts as second line of defense programs to adequately address the ML/FT risks identified
for Compliance Risk Management. through risk assessment.

The department ensures & measure the compliance &  Installed dedicated AML Monitoring System that analyzes,
governance risk associated with the development of monitors, detects and generates reports on customer’s
new products, process and business practices through transaction profiles and generates red flags, alerts, for
review of associated documents & process of the Bank. the suspicious transaction, on a daily basis, through
The department assesses & review timely submission of various scenarios constructed on the basis of indicators
regulatory returns by the reporting unit through a system of suspicion.
of monthly/quarterly/annual return checklist and report to
Senior Management. The department functions as a contact  Installed World compliance online search database tools
point for compliance queries from staff within the Bank, for screening of on boarding /existing customer.
and by Nepal Rastra Bank, Financial Intelligence Unit, Nepal
Government-money laundering Investigation department  Various elements of a sound risk management approach
and others regulatory authorities. is applied across most areas of the AML programs,
including Know Your Customer, Customer Due Diligence,
The department train/educate staffs on compliance issues Customer Risk Rating, Red Alerts and Transaction
through dissemination of relevant specified guidelines, Monitoring, Sanctions Screening, PEPs screening, Adverse
circulars, rules, regulations, notices, standards, manuals, Media Screening, Reporting and Retention of Record.
internal codes of conduct.

INFORMATION TECHNOLOGY SECURITY RISK

RISK MITIGATIONS AND MONITORING The Bank is aware that with increase dependency in
 Zero tolerance policy is adopted in relation to compliance technology and with digital first strategy it is exposed to IT
of regulations and internal policies risks and thus has made considerable investment to ensure
that customer data and the Banking system is more secure.
 Comprehensive compliance policies/procedures are
implemented and circulated to the Bank’s Department
RISK MITIGATIONS AND MONITORING
and its branches
The Bank has invested in software and network security
devices that makes the Bank’s system more secure and
 Compliance risks are identified and measured in relation
impenetrable. Information Security Department (ISD) and
to its regular business operations and development of
Identity Access Management (IAM) unit are formed which
new products and business practices.
is responsible for protecting the information/data of the
organization from unauthorized elements (external and
 Regulations, changes in regulations, policies are timely
internal) and CIA (confidentiality, Integrity and Availability)
disseminated to ensure compliance at all times.
by implementing and maintaining organization-wide
Information Security Policy, Standards, Guidelines and
 Employee training and education is carried out and
Procedures.
policies/regulations/manuals are made available

ISD works in consortium with IT Department, PSD and other

 Monitor timely submission of regulatory returns by the
related departments in order to conduct functionality and
reporting unit through a system of monthly/quarterly/
gap analysis to quantify various IT risks pertaining to different
annual return checklist.
key business areas and infrastructure and comply with
statutory and regulatory requirements. ISD conduct gap
analysis in accordance with NRB IT Guidelines and External
Audit report.

ANNUAL
138 REPORT 2023-24
The ISD scope and key activities carried out for IT Risk the Security Operations area under the authority of
Management of Bank is mentioned below: the Information Security Department. Performed and
reviewed Internal/External Vulnerability assessment.
 Enhanced Information Technology (IT) Security following
the periodic operational security procedures reviewing  Implemented and deployed Kaspersky Embedded
the Bank’s Information Security Policy, ICT policy, Standard System (KES) in the ATM machines that stops threats and
Operating Procedures, Profile and user manual. coordinates enforcement with network and cloud security
to prevent successful cyber-attacks.
 Reviewed and followed the best practices of the
industry regulatory standard including PCI DSS, ISO  Deployed a new generation firewall and review the
27001:2013, ISACA’s COBIT 5 framework on Governance Firewall rule set policy to intact ACL (Access Control list).
& Management of IT; IS acquisition, Development and
Implementation; IS operation, maintenance and service  Preparing ISD/IAM activity report every quarter as planned,
management; Protection of Information Assets. summarizing key security activities, access control
reviews, system audits, incident response, and any
 Reviewed IT Risk Management Framework and IT Risk improvements or issues identified within the Identity and
assessment of define scoping systems, application/ Access.
database and network devices, which would help, further
in IT/Operation risk assessment in determining the  Regularly/Periodically review and audit PAM (Privileged
probability of occurrence of the incident. Access Management) users and system access to
ensure only authorized personnel have elevated access,
 Developed a security infrastructure and scope for IT Risk preventing misuse and potential insider threats.
Assessment to protect SBL assets through accountability
and inventory list, data classification/categorization, and  Review and ensure compliance with the SWIFT Customer
handling procedures. Security Programme (CSP) requirements.

 Prepared Incident Response Plan with alert level  Rank newly discovered vulnerabilities by risk level and
information to detect, respond to and limit the effects of ensure timely remediation processes are implemented.
an information security event.
ENVIRONMENT AND SOCIAL RISK
 To protect against the loss of data in the event of physical Environmental and social (E&S) risk refers to the potential
disaster or other incidents, which may lead to the loss of adverse impact of a bank’s business operations and
data (e.g. data corruption), the ISD has maintained and financing activities on the environment and society.
reviewed the system data backup documents as a part of This includes risks related to pollution, climate change,
the process of onboarding and off boarding applications/ deforestation, labor rights violations, and displacement
database, system, network etc. of communities. Financial institutions assess these risks
to ensure that their operation, lending and investment
 Security alerts are monitored and analyzed and decisions align with sustainable development practices.
distributed to appropriate information security IT team,
technical and business unit, management personnel.
RISK MITIGATIONS AND MONITORING
The Bank employs a structured approach to mitigate
 Phishing simulation are carried out by Information Security
environmental and social risks. Major activities taken to
Department (ISD) as a sample basis within Branches
mitigate and monitor the Environment and Social Risk are:
including Departments that ISD can use to educate
and train bank’s staff/executives/stakeholders and the
 Using the ESDD checklist to assign risk ratings (High,
enterprise workforce to recognize and avoid falling victim
Medium, Low) and preparing E&S Risk Summaries and
to a real phishing campaign.
Corrective Action Plans for High and Medium risks.

 Protection of system and data are ensured by

 Integrating corrective action plans into loan documents,
implementing seamless access management processes,
specifying mitigation measures, timelines, and responsible
which aim to ensure that only authorized users are able
parties.
to access it. Detect and prevent unauthorized access
with timely and periodic review with Information Security
 Conducting periodic monitoring to ensure risks are
Department of user rights assigned.
mitigated as per the action plans and that the E&S risk
profile does not escalate.
 Implemented Web Application Firewall (WAF) to ensure
it is continuously blocking web malicious traffic and
 Embedding E&S risk considerations into credit proposals
allowing legitimate traffic. Regularly review logs to identify
and decision-making processes.
any potential security threats.

 Providing regular training to staff and business units to

 The development, implementation and execution of
ensure compliance with ESRM guidelines.
the vulnerability management procedure defined in
SBL Information Security Policy, is the responsibility of

ANNUAL 139
REPORT 2023-24
 IT SYSTEMS AND CONTROLS INCLUDING DATA PRIVACY AND CYBER SECURITY
The Bank has invested in advanced software and network security devices to enhance the security and resilience of its IT
infrastructure. The Information Security Department (ISD) and the Identity Access Management (IAM) unit are responsible for
safeguarding the Bank’s data and systems against unauthorized access, ensuring Confidentiality, Integrity, and Availability
(CIA). These units implement and maintain organization-wide security policies, standards, and procedures while collaborating
with the IT Department and other key stakeholders to conduct functionality and gap analyses. Regular risk assessments are
carried out in alignment with regulatory guidelines, including the NRB IT Guidelines and industry best practices such as PCI
DSS, ISO 27001:2013, and ISACA’s COBIT 5 framework. The Bank has also implemented various security measures, including Web
Application Firewalls (WAF), Privileged Access Management (PAM), and endpoint protection solutions, to detect and mitigate
cyber threats proactively.

To further strengthen its cyber resilience, the Bank conducts periodic IT risk assessments, external and internal vulnerability
management exercises, and phishing simulations to enhance staff awareness of cyber threats. Backup and recovery
procedures for critical systems are regularly reviewed to ensure data integrity and business continuity in the event of
disruptions. Compliance with the SWIFT Customer Security Programme (CSP) is continuously monitored to meet international
security standards, and security event logs are analyzed daily for potential threats. The Bank remains committed to
continuously enhancing its cybersecurity framework, implementing emerging technologies, and adopting best practices to
safeguard its digital assets, ensuring robust protection against evolving cyber risks.

MANAGEMENT AND AUDIT COMMITTEE/AUDITOR COMMENTS/

ASSURANCE ON INTERNAL CONTROLS OF THE ORGANIZATION
Siddhartha Bank has established a robust internal control  Risk Management: Ensuring that appropriate risk
system designed to ensure the integrity of financial management practices are in place to mitigate both
reporting, operational efficiency, and regulatory compliance. operational and financial risks.
The system aims to safeguard assets, detect fraud, and
ensure that all operations align with the Bank’s strategic  Independent Review: Evaluating the findings of the
objectives. The bank’s internal control framework includes external auditors and ensuring that any corrective actions
comprehensive procedures for risk management, are implemented by management.
compliance, financial reporting, and operational efficiency.
The Audit Committee conducts periodic assessments of
The management of Siddhartha Bank is committed to the internal control framework to ensure the Bank remains
maintaining an effective internal control system. It is compliant with regulatory requirements and that risk is
responsible for: managed effectively. The committee meets regularly to
review audit findings and the status of corrective actions.
 Designing, implementing, and monitoring internal controls
that align with best practices. ASSURANCE ON RISK MANAGEMENT
Siddhartha Bank has a well-defined risk management
 Ensuring that the controls are working effectively to framework in place, which was reviewed as part of
mitigate financial and operational risks. the internal control audit. The Audit Committee and
management are confident that the Bank has appropriate
 Regularly reviewing and updating controls to address new mechanisms to identify, assess, and mitigate risks effectively.
risks and improve overall efficiency. Regular risk assessments are conducted to address
emerging risks, including cybersecurity threats, credit risk,
 Reporting any material weaknesses or deviations from the and market risk.
established control framework.

KEY AREAS OF FOCUS AND RECOMMENDATIONS

The Audit Committee plays a vital role in overseeing the
Based on the audit and internal control review, the following
effectiveness of internal controls at Siddhartha Bank.
key areas have been highlighted for ongoing attention:

KEY RESPONSIBILITIES OF THE AUDIT COMMITTEE  Fraud Prevention: While the fraud prevention systems are
 Oversight of Financial Reporting: Reviewing largely effective, the Bank should implement regular staff
financial statements and ensuring the accuracy and training programs to ensure heightened vigilance.
completeness of financial reporting.
 Operational Efficiency: The bank should consider
 Internal Audit Oversight: Regularly reviewing the internal automating certain manual processes, especially in loan
audit reports to assess the performance of the internal origination and documentation, to streamline operations
control system. and reduce the risk of human error.

ANNUAL
140 REPORT 2023-24
 Regulatory Compliance: It is essential for the Bank to conduct periodic compliance audits to ensure all regulatory
requirements are being met and to address any potential gaps proactively.

 Technology and Cybersecurity: With the increasing reliance on technology, the Bank should enhance its cybersecurity
measures and conduct frequent IT risk assessments to address new and evolving threats.

Overall, Siddhartha Bank’s internal control system is effective in managing risks and ensuring compliance with applicable
regulations. The management and Audit Committee are committed to addressing any identified deficiencies and
strengthening internal controls where necessary. The external auditor’s unqualified opinion further assures stakeholders that
the financial reporting and internal controls at Siddhartha Bank are generally sound.

The Audit Committee will continue to monitor the effectiveness of the internal control framework and ensure that
management takes appropriate corrective actions where needed. The ongoing efforts to improve the internal control system,
including enhancing fraud prevention, operational efficiency, and IT controls, will ensure that the Bank remains well-positioned
to manage risks and achieve its strategic goals.

MAJOR UNCERTAINTIES FACED BY THE BANK AND RISK MITIGATION STRATEGIES

During the fiscal year, the Bank encountered significant uncertainties arising from multiple risk dimensions, primarily
operational, credit, market, and information security risks.

MAJOR RISK
UNCERTAINTY FACED BY THE BANK BANK RISK MITIGATION STRATEGIES
AREAS

Credit Risk  Credit risk were directly impacted with  The Bank’s recovery policy focuses on early
Macroeconomic conditions, regulatory changes, intervention, restructuring, and legal measures
and sector-specific challenges resulting borrowers to improve loan recovery rates and minimize
inability to meet obligations. Economic downturns, losses.
inflation, and interest rate volatility have impacted
repayment capacities, contributing to an increase  The Bank mitigates credit risk through
in Non-Performing Assets (NPA) in Banking Industry diversification across sectors, regions,
in fiscal year 2022-23. However, through the Bank’s borrowers, and loan types while adhering to
persistent efforts and strategic measures, NPA% i.e. its risk appetite framework which strengthens
2.17% was maintained below the industry average financial stability and resilience.
i.e. 3.54%, marking a notable improvement in asset
 The Bank employs risk-based pricing, aligning
quality.
loan interest rates with borrower risk profiles to
 Further, regulatory changes including stricter balance its portfolio and mitigate credit risk.
loan classification norms and capital adequacy
 The Bank’s adapts competent collateral
requirements, have impacted the Bank’s existing
management strategy which aligns with
portfolio and business expansion. Sector-specific
accepting a variety of collateral types,
risks contribute to credit uncertainties, with
ensuring precise valuations and securing legal
industries like real estate, manufacturing, and
protection to safeguards the Bank’s financial
MSMEs being highly vulnerable to economic
stability.
fluctuations.
 The Bank focuses on maintaining strong capital
 Real estate faces regulatory challenges and
reserves which helps to absorb potential
fluctuating property values, manufacturing decline
losses, comply with regulations, and ensure
with rising costs and supply chain disruptions,
financial stability.
and MSMEs grapple with liquidity constraints and
reduced consumer spending.

Operational  Operational risk were largely driven by human  The Bank implemented automation and
Risk errors, external party’s fraud attempts, and digitalization to reduce human intervention
increasing reliance on digital banking, which and minimize errors.
exposed the Bank to dependency with third parties
vendor. A substantial number of operational risk  The Bank introduced an Operational Risk
events stemmed from employee-related errors, Register enabled real-time tracking of risk
system failures and dependency on third-party events, ensuring swift corrective action.
service providers led to disruptions in banking
 The Bank also tightened its third-party risk
services.
management by conducting detail vendor
assessments and compliance checks.

ANNUAL 141
REPORT 2023-24
 MAJOR RISK
UNCERTAINTY FACED BY THE BANK BANK RISK MITIGATION STRATEGIES
AREAS

Market and  Market risk was impacted by highly fluctuating  The Bank adopted a structured asset-liability
Liquidity interest rates, foreign exchange volatility, and management strategy, incorporating interest
Risk declining equity market valuations. Unfavorable rate gap analysis, foreign exchange risk
changes in interest rates affected the Bank’s net hedging, and investment diversification.
interest margins, while foreign exchange risks
 Stress testing and scenario analysis were
posed challenges in cross-border transactions
conducted regularly to assess the Bank’s
and asset valuations.
resilience under varying economic conditions.
 Additionally, maintaining adequate liquidity
 Liquidity risk was managed by maintaining
levels to meet both short-term and long-term
adequate liquidity buffers, implementing
obligations was a key concern, as economic
funding contingency plans, and diversifying
uncertainty heightened the risk of potential
the deposit portfolio to reduce dependence
funding constraints
on volatile short-term funding sources.

Information  The rapid expansion of digital banking service  Bank significantly enhanced its IT security
Security Risk within the Bank exposed to cyber threats, hacking infrastructure by deploying real-time
attempts, and unauthorized data breaches. As threat monitoring systems, multi-factor
financial transactions increasingly moved online, authentication, and advanced data
the risks of phishing attacks, digital fraud, and encryption techniques.
system downtimes intensified.
 A cybersecurity response team was
 Further, changes in regulatory compliance with established to monitor and address threats
evolving cybersecurity guidelines along with proactively.
maintaining customer trust required the Bank to
 Conducted regular IT audits to ensured
implement strong and updated security protocols
compliance with regulatory requirements,
with change in external environment.
and organize customer education programs
on secure online banking practices to
mitigate the risks of phishing and fraud.

 The bank also strengthened its disaster

recovery and business continuity plans to
minimize operational disruptions in case of
cyber incidents or system failures.

Compliance  The Bank face AML/CFT and compliance  Regularly assess compliance with NRB
and AML/ uncertainties due to frequent regulatory changes, Directives and other regulations through an
CFT financial integrity requirements, and an evolving enhanced checklist and quarterly reviews.
business landscape.
 Restrict account transactions for incomplete
 Implementing KYC procedures, particularly the documentation and deficient KYC
requirement of National Identity Document (NID) compliance.
for account opening, poses challenges due to
 Conduct ongoing staff training on regulatory
varying customer literacy levels.
updates, internal policies, and procedures.
 Financial inclusion efforts have led to increased
 Enhance regulatory reporting accuracy and
account openings, especially in rural areas,
disclosure effectiveness.
resulting in compliance and AML risks from
incomplete documentation and KYC failures.  Establish regulatory coordination to access
BO and telecom databases for improved
 Further, the Bank faces significant AML compliance
customer verification and KYC compliance.
challenges due to restricted access to Beneficial
Implement digital solutions for automated
Owner (BO) information from the Company’s
verification of identity and transaction
Registrar Office, leading to outdated records and
monitoring.
increased risks in BO identification, as per Assets
(Money) Laundering Prevention Rules, 2081, Clause
No. 79.

 Additionally, the inability to access the Telecom

Authority’s mobile number database hinders
prompt customer verification, raising fraud
risks and compliance concerns under Unified
Directive No. 19/2081, Clause 2(11). These limitations
create regulatory gaps, necessitating enhanced
collaboration and system improvements.

ANNUAL
142 REPORT 2023-24
DISCLOSURE OF RISK REPORTING
CREDIT RISK

SINGLE OBLIGOR CONCENTRATION (LOAN LIMIT % OF CORE CAPITAL)

LOAN EXPOSURE LOAN EXPOSURE

S.N. PARTICULARS LIMIT OF NRB
(AS ON FY 2022-23) (AS ON FY 2023-24)

1 Single Obligor Limit 25% 10.60% 19.89%

2 SOL (Productive Sector) 30% 17.28% 18.51%

3 SOL (Hydropower Sector) 50% 17.06% 21.83%

SECTOR WISE LOAN CONCENTRATION OF THE BANK

LOAN EXPOSURE CONCENTRATION (%)

1.21% 2.00%
7.95%

2.60% 23.40%

11.04%

4.41% 5.61%

0.40%
4.17%
0.31%
7.69% 3.77%

6.26% 19.11%
0.07%

Other Services Wholesaler & Retailer

Hotel or Restaurant Consumption Loans
Construction Non-food Production Related
Transport, Communication Electricity, Gas and Water
and Public Utilities
Agricultural and Forest Related
Metal Products, Machinery &
Electronic Equipment & Assemblage Finance, Insurance and Real Estate
Fishery Related Others
Mining Related Agriculture, Forestry & Beverage
Local Government Production Related

ANNUAL 143
REPORT 2023-24
 TOP BORROWER WISE EXPOSURE
NPR in Million
15 JULY 2024
BORROWERS
FUNDED EXPOSURE NON- FUNDED EXPOSURE TOTAL LOAN EXPOSURE

1 1,659.79 1,766.20 3,425.99

2 2,326.31 32.10 2,358.41

3 1,182.83 924.30 2,107.13

4 1,841.00 - 1,841.00

5 1,579.43 - 1,579.43

6 1,192.30 298.11 1,490.41

7 1,324.41 17.07 1,341.48

8 1,304.94 32.95 1,337.89

9 1,101.71 106.28 1,207.99

10 274.51 887.90 1,162.41

11 1,064.92 59.38 1,124.30

12 - 1,099.48 1,099.48

13 729.81 330.14 1,059.95

14 706.42 342.27 1,048.69

15 888.53 97.73 986.26

16 941.53 - 941.53

17 - 926.42 926.42

18 871.50 - 871.50

19 658.59 207.86 866.45

20 735.82 109.99 845.81

ADDITIONAL SECTORS CONCENTRATION

LOAN EXPOSURE LOAN EXPOSURE

S.N. PARTICULARS LIMIT OF NRB
AS ON FY 2022-23 AS ON FY 2023-24

1 Real Estate Lending 25% 3.10% 2.30%

2 Total Margin Lending 40% 20.24% 25.93%

SINGLE BORROWER’S CONCENTRATION

LOAN EXPOSURE LOAN EXPOSURE

S.N. PARTICULARS LIMIT OF NRB
AS ON FY 2022-23 AS ON FY 2023-24

Exposure Cap for Single Borrowers (% of Total Loans and Advances)

1 Top 10 borrowers - 6.60% 7.16%

2 Top 100 borrowers - 25.36% 26.36%

ANNUAL
144 REPORT 2023-24
PROVINCE WISE EXPOSURE

PROVINCE 15 JULY 2024

Koshi 23,774.71

Madhesh 25,831.79

Bagmati 99,015.40

Gandaki 16,800.76

Lumbini 27,761.16

Karnali 2,170.37

Sudurpaschim 8,205.63

Total 203,559.82

NRB PRODUCTS WISE EXPOSURE As of 15 July 2024

PRODUCTS LOAN EXPOSURE LOAN EXPOSURE CONCENTRATION (%)

Term Loan 98,258.57 48.27%

Overdraft 2,921.30 1.44%

Cash Credit Loan 23,214.42 11.40%

Trust Receipt Loan/Import Loan 4,183.19 2.06%

Short Term Working Capital/Demand Loan 30,161.93 14.82%

Residential Personal Home Loan (Up to Rs. 20 million) 11,893.29 5.84%

Real Estate Loan 4,569.66 2.24%

Margin Nature Loan 5,789.78 2.84%

Hire Purchase Loan 4,413.28 2.17%

Deprived Sector Loan 9,993.64 4.91%

Bills Purchased 400.51 0.20%

Other Product 7,760.25 3.81%

Total 203,559.82

MARKET RISK

STRESS TESTING
As part of the Bank’s commitment to fostering a strong risk Bank’s risk profile and highlights vulnerabilities to extreme
culture, stress testing is recognized as a critical tool within its events. It plays a vital role in facilitating the development of
risk management program. Stress testing is an integral part risk mitigation strategies and contingency plans for a range
of the risk management framework and capital planning of stressed scenarios. Additionally, stress testing supports
process, enabling the Bank to effectively manage risk the institution’s decision-making processes, including
exposures and maintain robust risk governance. It serves the establishment of risk appetite, exposure limits, and
as a tool to assess the potential impact of a defined set the evaluation of strategic options in long-term business
of changes in risk factors on the Bank’s financial position planning.
under severe yet plausible scenarios, thereby supporting the
Board and Management in informed decision-making. Stress In line with regulatory requirements, the Central Bank has
testing encompasses not only the technical application mandated all banks to conduct and submit stress testing
of specific stress tests but also considers the broader results on a quarterly basis. The Bank performs stress tests
environment in which these tests are developed, evaluated, across key risk areas, including credit, market, and liquidity
and utilized. scenarios, and submits the outcomes to the Central Bank
after thorough review by senior management and the Board.
As a complement to the Bank’s other quantitative risk This process ensures the Bank remains resilient and well-
management tools which often rely on historical data and prepared to navigate potential challenges while maintaining
statistical models stress testing provides insights into the financial stability

ANNUAL 145
REPORT 2023-24
 NET OPEN POSITION
Net open currency position is the un-hedged position in all the foreign currencies that exposes the Bank to the foreign
exchange risk.

NPR in Million

NET OPEN POSITION

FOREIGN CURRENCIES
FY 2022-23 FY 2023-24
AED 27.08 10.29

AUD (1.86) 0.15

BDT - -

BHD 0.11 0.15

CAD 3.66 0.64

CHF 2.16 0.77

CNY 6.91 11.65

DKK 0.20 0.01

EUR (1.15) 2.95

GBP (1.80) (0.35)

HKD 1.23 0.41

INR 218.40 3,566.84

JPY (1.19) 0.30

KRW (6.45) (2.63)

KWD 0.34 0.16

MYR 2.60 0.75

QAR 1.70 0.53

SAR 1.76 1.20

SEK 0.11 0.11

SGD 11.08 (0.81)

THB 0.20 0.62

USD 573.08 (308.53)

Net Open Position 838.16 3,285.22

Core Capital (as of previous quarter) 20,122.82 22,325.75

Net Position to Core Capital 4.17% 14.71%

DEPOSIT MIX AND CONCENTRATION

NPR in Million
PARTICULAR FY 2022-23 % MIX FY 2023-24 % MIX

Current 13,108 5.87% 12,245 5.06%

Margin 1,743 0.78% 1,344 0.56%

Saving 59,718 26.73% 77,141 31.88%

Call 19,069 8.53% 22,213 9.18%

Fixed 129,795 58.09% 129,060 53.33%

Total LCY Deposit 223,432 242,004

ANNUAL
146 REPORT 2023-24
CASA MIX
NPR in Million

PARTICULARS FY 2022-23 % MIX FY 2023-24 % MIX

Current Deposit (Including Margin) 14,851 6.65% 13,590 5.62%

Saving Deposit 59,718 26.73% 77,141 31.88%

Total CASA 74,569 33.37% 90,730 37.49%

Total LCY Deposits 223,432 242,004

CONCENTRATION OF DEPOSIT ON TOP 20 DEPOSITORS AS OF 15 JULY 2024

REGULATORY
SN PARTICULARS INTERNAL CAP ACTUAL RATIO
THRESHOLD
Depositor’s Concentration

1 % of Top 20 Depositors 25% - 9.52%

AML/CFT RISK ASSESSMENT

The Bank has conducted the AML/CFT risk assessment in The Bank conducts ICAAP assessments quarterly, ensuring
accordance with the requirement of Unified Directives No. a continuous evaluation of its risk profile and capital
19 (9) (3) issued by Nepal Rastra Bank and prepared the requirements. The assessment covers key areas such as
AML/CFT risk assessment report for the period 17 July 2023 business strategy, capital planning, risk assessment, stress
to 15 July 2024.The Bank has conducted risk assessment testing, and scenario analysis. ICAAP integrates various
for the identification & assessment of underlying threats risk types, including credit risk, market risk, operational risk,
and vulnerabilities in the Banking environment through liquidity risk, and emerging risks such as climate change
assessment of various factors such customer base, and IT risk. By adopting a regulator-driven risk assessment
geography locations, product & services offered and delivery methodology, the Bank ensures a comprehensive capital
channels. allocation framework, employing the Simplified Standard
Approach (SSA) for credit risk, the Net Open Position
Based on the annual risk assessment conducted by the Approach for market risk, and the Basic Indicator Approach
Bank on the various risk factors such as Customer, Product & for operational risk.
services, Delivery channel and Geography, overall inherent
risk of the Bank for FY 2023-24 is Medium rating. The Bank has successfully maintained its Tier-I capital ratio
above the regulatory requirement of 9% and a Total Capital
The Bank has various control mechanisms for offsetting Adequacy Ratio (CAR) above 11.5%. As of the end of fiscal year
overall inherent risk. AML control of the Bank is assessed 2023-24, the Bank’s Risk-Weighted Exposure (RWE) stood at
based on various preventive control such as policy & NPR 224,728 million, while the Total Capital Fund amounted
procedures, training, AML program, AML governance, to NPR 29,729 million, reflecting a Capital Adequacy Ratio
Management Oversight and detective control such as (CAR) of 12.15%. Credit risk constitutes approximately 90%
monitoring & control, independent testing & assurance, of the total RWE, indicating the need for robust credit risk
detection & filing of STR/SARs. Hence the AML control of the management practices. During the fiscal year, the Tier-I
Bank is adequate and helps detect/ control potential AML capital ratio increased from 9.44% to 9.65%, primarily driven
risk but have the scope of improvement. The residual risk is by profit growth, while CAR declined from 12.53% to 12.15% due
the risk remaining post assessment of control against the to a reduction in supplementary capital.
identified inherent risk. Hence the residual risk of the Bank
after applying the control measures is Medium rating. Stress testing and scenario analysis form an integral part of
ICAAP, enabling the Bank to assess potential financial shocks
SUMMARY OF BANK ICAAP ASSESSMENT and take preemptive actions. The Bank conducts stress
Siddhartha Bank Limited has developed and implemented tests based on NRB regulatory parameters and internal
the Internal Capital Adequacy Assessment Process (ICAAP) risk models, analyzing factors such as market fluctuations,
Policy, ensuring a structured approach to evaluating and credit defaults, and liquidity constraints. These exercises
managing its internal capital adequacy. This policy enables ensure that the Bank can withstand adverse conditions while
the Bank to assess its capital requirements in alignment maintaining financial stability and regulatory compliance.
with identified risks while ensuring compliance with both
internal policies and regulatory standards set by the Nepal The ICAAP risk assessment identifies major exposures and
Rastra Bank (NRB). The ICAAP report serves as a crucial tool mitigation strategies, with credit risk managed through
for strategic decision-making by the Board of Directors, rigorous underwriting, collateral assessments, and risk-based
providing insights into risk assessment, capital planning, and pricing. The Bank monitors loan concentrations, counterparty
overall financial stability. exposures, and portfolio diversification to minimize defaults,
while operational risk management focuses on internal

ANNUAL 147
REPORT 2023-24
 controls, cybersecurity, and business continuity. Risk governance aligns with the Bank’s risk appetite and is overseen by
Board and management committees. Recognizing climate change as a key financial risk, the Bank integrates environmental
considerations into its framework, promoting green financing, sustainable investments, and ESG-compliant lending for long-
term resilience.

The Bank’s comprehensive capital plan aligns with its strategic objectives, anticipating business growth, credit expansion,
and capital adequacy needs. Despite economic challenges, it has maintained stable growth and strengthened its financial
position. Though profitability faced pressure due to higher loan loss provisions, the Bank remains committed to sustainable
expansion. With strong capital adequacy and effective risk management, the ICAAP framework supports proactive risk
assessment and regulatory compliance. Moving forward, the Bank will refine its capital strategies, enhance risk governance,
and strengthen resilience against emerging risks to ensure long-term stability and value for stakeholders.

ESRM DISCLOSURE

ANNUAL STATEMENT ON ENVIRONMENTAL AND SOCIAL RISK MANAGEMENT FOR FY 2023-24

1 POLICY FORMULATION AND GOVERNANCE YES/NO DATE REMARKS

06/06/2019  Approved through 315th Board

Formulation and Board approval of an ESRM Meeting
1.1 Yes
Policy (or similar policy document) 09/08/2022  Amendment policy approved
through 398th Board Meeting

 Approved through 315th Board

06/06/2019
Formulation and Board approval of an ESRM Meeting
1.2 Yes
Procedure (Manual)  Amendment approved through
09/08/2022
398th Board Meeting

1.3 Nomination of an E&S Officer Yes 06/11/2022  Head Credit Risk

2 EMPLOYEE TRAININGS AND CAPACITY BUILDING Q1 Q2 Q3 Q4 TOTAL

Allocation of Fund in the budget for ESRM Training

2.1 80,565.60 - 228,594.96 234,694.80 543,855.36
Programs/Seminars/Workshops (in NPR):

No. of ESRM Training Programs/Seminars/Workshops

2.2 1 - 3 2 6
conducted in the given quarter:

No. of attendees of the ESRM Training Programs/Seminars/

2.3 1 - 5 76 82
Workshops conducted in the given quarter:

INCORPORATION OF ENVIRONMENTAL & SOCIAL RISK IN CORE

3 Q1 Q2 Q3 Q4 TOTAL
RISKS MANAGEMENT

3.1 No. of loan requests rejected due to the Exclusion List - - - - -

No. of transactions subject to Environmental & Social

3.2 32 31 23 38 124
Due Diligence (ESDD)

Share (% total loan value) of the transactions subject

3.3 to ESDD in the total disbursed commercial (business
purpose) loan portfolio 15.48% 27.22% 17.98% 32.57%

3.4 Total No. of disbursed transactions by E&S Risk Rating:

Low 32 29 19 29 109

Medium - 2 4 9 15

High - - - - -

Total amount in disbursed transactions by E&S Risk

3.5
Rating (figure in Million):

Low 692.80 1074.259 594.45 1288.24 3,650

Medium - 97.9 180.753 541.975 821

High - - - - -

3.6 No. transactions with specific E&S Action Plan: - 2 4 9 15

ANNUAL
148 REPORT 2023-24
 INCORPORATION OF ENVIRONMENTAL & SOCIAL RISK IN CORE
3 Q1 Q2 Q3 Q4 TOTAL
RISKS MANAGEMENT

No. of transactions rejected on the E&S risk

3.7 - - - - -
management grounds:

3.8 No. of transactions beneficial to E&S improvements: - - 1 2 3

Renewable Energy Projects (e.g. hydro power plants,

- - 1 1 2
solar panels, biogas plants, wind power)

Energy efficiency Projects (e.g. efficient lighting, heating/

- - - 1 1
cooling, ventilation, boiler retrofitting, facility upgrades)

Effluents (Wastewater) Treatment Plants

Waste Recycling and Reuse

Water consumption reduction

ANNUAL 149
REPORT 2023-24
 ANNUAL
150 REPORT 2023-24
CORPORATE
GOVERNANCE

ANNUAL 151
REPORT 2023-24
 BOARD OF DIRECTORS
The Board of Directors play a pivotal role in formulating policy decisions for the overall operation and management of the
Bank. It approves various proposals in accordance with prevailing laws and the Bank’s internal policies and regulations.
Additionally, the board is responsible for drafting the Bank’s short-term and long-term plans and strategies while actively
engaging in discussions on various business-related risks, such as credit risk, market risk, operational risk, and liquidity risk,
among others. It continuously monitors and makes necessary decisions to mitigate such risks.

To ensure effective governance, the Board of Directors conducts regular meetings while adhering to the standards set by
regulatory bodies and applicable legal frameworks.

Furthermore, the board reviews the reports and recommendations presented by external and internal auditors. Based on
these assessments, necessary directives are provided to the management for implementation, and the board periodically
reviews the status of such implementations.

Additionally, reports from the Audit Committee, Risk Management Committee, Employee Benefits Committee, and Anti-Money
Laundering Prevention Committee are regularly submitted to the Board of Directors. The board deliberates on these reports,
incorporates relevant recommendations, and takes necessary decisions to ensure the Bank’s governance framework remains
robust and efficient.

The following members are actively serving on the Bank’s Board of Directors:

DATE OF
S.N. NAME DESIGNATION
APPOINTMENT

Mr. Manoj Kumar Kedia (Representative – Prudential Investment Company

1 Chairman
Pvt. Ltd., Promoter Shareholder)

2 Mr. Narendra Kumar Agrawal (Promoter Shareholder) Director

3 Mr. Rahul Agrawal (Promoter Shareholder) Director

Mr. Dinesh Shanker Palikhe (Representative - Ginni Investment Pvt. Ltd., Public 29 January 2021
4 Director
Shareholder)

Mr. Ankit Kedia (Representative- Leverage Holdings Pvt. Ltd., Public

5 Director
Shareholder)

Independent
6 Mrs. Mina Kumari Sainju 27 April 2021
Director

The directors listed in serial numbers 1, 2, 3, 4, and 5 were elected by the Bank’s 19th Annual General Meeting. In the 369th board
meeting held on 27 April 2021, Mrs. Mina Kumari Sainju was appointed as an Independent Director. This appointment was
subsequently approved by the Bank’s 20th Annual General Meeting, held on 14 January 2022.

During the review period, no changes were made to the Board of Directors.

ANNUAL
152 REPORT 2023-24
BOARD-LEVEL COMMITTEES
As per the Banks and Financial Institutions Act, 2073, the Companies Act, 2063, the Unified Directives issued by Nepal Rastra
Bank, the Corporate Governance Guidelines for Listed Institutions, 2074, and the Bank’s internal regulations, four board-level
committees are actively functioning in the Bank, with a designated director as the coordinator. These committees include the
Audit Committee, Risk Management Committee, Employee Service & Benefits Committee, and Anti-Money Laundering (AML)
Committee.

AUDIT COMMITTEE
In compliance with the Companies Act, 2063, the Banks and Financial Institutions Act, 2073, and the directives issued by Nepal
Rastra Bank, the Audit Committee is actively functioning in the Bank.

S.N. MEMBERS OF AUDIT COMMITTEE POSITION

1 Dinesh Shankar Palikhe, Director Convener
2 Narendra Kumar Agrawal, Director Member
3 *Sanjay Pradhan, Manager, Internal Audit Department Member Secretary

*Nirakar Bahadur Singh, Head Sudurpaschim Province, served as the Member Secretary of this committee. However, following
his appointment as the Head of the Sudurpaschim Province Office on 16 August 2023, Sanjay Pradhan has been designated as
the new Member Secretary.

THE TERMS OF REFERENCE (TOR) OF THIS COMMITTEE ARE AS

FOLLOWS
 Periodically review the overall financial condition, internal  Review the quarterly financial statements of the Bank and
controls, audit plan, and findings of internal audits of the submit reports to the Board of Directors.
licensed institution in accordance with prevailing laws.  Carry out responsibilities outlined in Section 61 of the
Provide necessary directions to the management and Banks and Financial Institutions Act, 2073, and Section 165
submit recommendations to the Board of Directors. of the Companies Act, 2063.

 Review the audit report submitted by the external auditor, KEY DISCUSSIONS, REVIEWS, AND DECISIONS DURING THE REVIEW
assess the key observations, and direct management to PERIOD
take corrective measures.  Discussions on internal audits conducted in various
branches and departments as per the annual internal
 Monitor the implementation of observations and audit plan.
recommendations made in the inspection and
supervision reports issued by Nepal Rastra Bank (NRB)  Review of audit reports related to Letter of Credit (LC)
and maintain proper records for reporting to the Board of transactions in different branch offices.
Directors.
 Discussions on audit reports concerning investment and
 Assist the management in ensuring the accuracy and risk management.
fairness of the annual financial statements of the licensed
institution.  Assessment of the Bank’s operational efficiency, cost-
effectiveness, legitimacy, and effectiveness, along with
 Assure the Board of Directors regarding the accuracy recommendations to the Board of Directors.
and integrity of the institution’s financial records, assess
potential liabilities, and regularly review provisions related  Recommendation of three external auditors to the Board
to loan classification and provisioning. of Directors for the Fiscal Year 2023-24.

 Review the compliance status of the institution with  Discussion on the Concurrent Audit Reports of various
prevailing laws and regulatory requirements issued by departments under the central office.
Nepal Rastra Bank, and incorporate such matters in the
committee’s report.  Review of the Bank’s quarterly financial statements.

 Develop a comprehensive internal audit framework and  Discussion on the Branch-wise Flash Report on Advances.
ensure that internal audits are conducted accordingly.
 Review of the Early Warning Signal Report on loan
 Review whether the institution is maintaining consistency, portfolios of branch offices.
cost-effectiveness, legitimacy, and efficiency in its
operations and provide necessary recommendations to  Assessment of the Capital Fund Statement and Base Rate
the Board of Directors. certified by the internal audit department.

ANNUAL 153
REPORT 2023-24
  Discussion on the performance evaluation of the Head of Team under NRB’s Supervision Department and directives
the Internal Audit Department. to management for corrective measures.

 Review of key observations from the external auditor’s  Discussion on the achievements of the Fiscal Year 2023-
report and necessary corrective actions to be 24 as per the approved policies and programs of the
implemented by the management. internal audit department.

 Evaluation of observations made by the Supervision  Review and approval of the Risk-Based Annual Audit Plan
(RBAAP) for Fiscal Year 2023-24.

IN THE FISCAL YEAR 2023-24, A TOTAL OF 19 MEETINGS OF THE AUDIT COMMITTEE WERE HELD AS FOLLOWS

S.N. MEETING NO. DATE OF MEETING (A.D.)

1 215 27-07-2023

2 216 14-08-2023

3 217 01-09-2023

4 218 12-09-2023

5 219 05-10-2023

6 220 19-10-2023

7 221 07-11-2023

8 222 03-12-2023

9 223 14-12-2023

10 224 03-01-2024

11 225 01-02-2024

12 226 21-02-2024

13 227 27-02-2024

14 228 07-04-2024

15 229 02-05-2024

16 230 12-05-2024

17 231 06-06-2024

18 232 01-07-2024

19 233 14-07-2024

THE DETAILS OF MEMBERS’ ATTENDANCE AND MEETING ALLOWANCE AMOUNTS IN THE AUDIT COMMITTEE MEETINGS FOR THE FISCAL YEAR 2080/81
ARE AS FOLLOWS

S.N. MEMBER NAME MEETINGS ATTENDED/TOTAL MEETING ALLOWANCE (NPR)

1 Dinesh Shanker Palikhe, Convener 19/19 266,000

2 Narendra Kumar Agrawal, Member 19/19 266,000

Sanjay Pradhan, Manager, Internal Audit Department,

3 15/15 -
Member Secretary

Nirakar Bahadur Singh*, Head Sudurpaschim Province, -

4 4/4
Member Secretary

 In the fiscal year 2023-24, no board member was absent from any audit committee meetings.

 No management officials participating in the meetings were provided with a meeting allowance.

 The audit committee presented its activity reports to the Board of Directors in the following meetings: the 418th meeting on
11 October 2023, the 419th meeting on 30 October 2023, the 421st meeting on 6 December 2023, the 425th meeting on 12 March
2024, and the 428th meeting on 21 May 2024.

ANNUAL
154 REPORT 2023-24
RISK MANAGEMENT COMMITTEE

As per Directive No. 6 issued under the Unified Directives of Nepal Rastra Bank, the Risk Management Committee is actively
functioning within the Bank. The committee consists of the following members:

S.N. NAMES OF RISK MANAGEMENT COMMITTEE MEMBERS POSITION

1 Narendra Kumar Agrawal, Director Convener

2 Dinesh Shankar Palikhe, Director Member

3 Pravin Nidhi Tiwari, Head- Operating Officer Member

4 Suresh Raj Maharjan, Chief Marketing Officer* Member

5 Shailaja Gyawali, Chief Integrated Risk Officer Member Secretary

*Suresh Raj Maharjan, Chief Marketing Officer, was a member of this committee, and from 30 August 2023, Pravin Nidhi Tiwari
has been serving as a member of this committee.

The Terms of Reference of this committee are as follows by the Asset-Liability Committee (ALCO) on a quarterly
 To inform the Board of Directors about the adequacy basis and present a report to the Board of Directors.
and appropriateness of the existing risk identification and
management systems and provide recommendations for  To study the impact of problems or changes in any
developing appropriate systems. sector of the economy on the financial condition of the
institution and provide recommendations to the Board of
 To regularly review the level of risk, risk-bearing capacity, Directors on what policies should be adopted to address
strategies developed for risk management, policy such issues.
arrangements, and guidance for business activities, and
present recommendations to the Board of Directors During the review period, the committee primarily
regarding their adequacy. discussed, reviewed, and made decisions on the following
subjects
 To regularly obtain risk management reports from  Drafting and reviewing policy documents.
management, assess, evaluate, control, and monitor risks,
discuss the ongoing process, and present necessary  Discussing the implementation status of the decisions
recommendations to the Board of Directors. made by the Bank’s Risk Management Committee for the
fiscal year 2023-24.
 To regularly analyze and discuss the adequacy of capital
according to risk-adjusted assets, the Internal Capital  Reviewing and discussing how to make the Bank’s risk
Adequacy Assessment Process (ICAAP), the adequacy of management policies and procedures more effective.
policy arrangements in line with the business strategy,
and the maximum risk the institution can take, and  Discussing sectoral loans that account for 50% to 100% of
provide the necessary advice and suggestions to the the Bank’s primary capital in the fiscal year 2023-24.
Board of Directors.
 Discussing key risk indicators related to loans.
 To provide recommendations to the Board of Directors
for the development of necessary policies and structures  Discussing the decisions made by the Asset-Liability
in line with the directives/guidelines issued by Nepal Management Committee.
Rastra Bank for risk management, internal limits set by the
institution, and suitable practices.  Discussing the details of the Bank’s annual risk
assessment.
 To conduct regular stress testing (sensitivity analysis) and
discuss the results, and based on those results, provide  Reviewing and discussing the Annual Internal Capital
recommendations to the Board of Directors for future Adequacy Report (ICAAP) under the Internal Capital
policy development or decision-making processes. Adequacy Policy (ICAAP).

 To analyze and evaluate the scope and rationale of  Reviewing and discussing the quarterly ICAAP reports.
the authority delegation from the Board of Directors
and submit a report to the Board along with necessary  Reviewing and discussing the Bank’s capital position,
suggestions. comparison with other banks with similar capital status,
and the impact of regulatory changes on the Bank’s
 To analyze and review the Bank’s asset structure, the capital.
operational status of these assets, income that can be
derived from them, changes in asset quality, and activities

ANNUAL 155
REPORT 2023-24
  Reviewing and discussing the annual reports on credit risk,  Review and discussion of GAAP (Generally Accepted
market risk, operational risk, and IT risk assessments. Accounting Principles) analysis of the Bank’s NPA.

 Reviewing and discussing quarterly stress testing  Review and discussion of borrowers classified under close
(sensitivity analysis) reports. monitoring who have insufficient loan-to-equity ratio and
negative net worth or have been reporting losses for the
 Conducting a comprehensive review and discussion last three consecutive years.
of the current status of hydropower in Nepal, potential
hydropower projects, and the Bank’s investments in  Quarterly review and discussion of the Operational Risk
hydropower projects. Tolerance Limit status.

 Review and discussion of the acceptable tolerance limits  Review and discussion of the Stress Testing Framework,
for key risk indicators of various departments in bank 2024 revision.
operations.
 Review and discussion of the revised ICAA (Internal
 Quarterly review and discussion of the Operational Risk Capital Adequacy Assessment) Policy.
Assessment Report.
 Quarterly review and discussion of the Credit Risk Report.
 Quarterly review and discussion of the Market and
Liquidity Risk Assessment Report.  Review and discussion of loan recovery strategies and
their implementation by branch offices for Loss Accounts.
 Discussion on Adverse Media Risk.
 Discussion on Backup Review and Recovery Testing of CBS
 Quarterly review and discussion of the updated status (Core Banking System) and Critical Security Programs.
of key risk indicators related to Operational and Support
Functions.  Discussion on the Information Technology Risk Report.

 Discussion on key risk events identified and reported  Discussion on the IT Assets Inventory List.
through the Risk Management Application by branches
and departments.  Discussion on External Web Vulnerability Management &
Assessment.
 Discussion on the status of the annual and five-year
strategic plans.  Review and discussion of the Phishing Campaign
conducted among employees.
 Quarterly review and discussion of the Credit Risk
Concentration Review Report. In the fiscal year 2023-24, a total of 8 meetings were
held from Meeting No. 59 to Meeting No. 66 of the Risk
 Review and discussion of the increased NPA (Non- Management Committee. These meetings were held on the
Performing Assets) in branches under the Far Western following dates: 14 August 2023, 30 August 2023, 14 December
Region. 2023, 17 December 2023, 15 March 2024, 3 May 2024, 12 May
2024, and 22 May 2024.

THE DETAILS OF THE ATTENDANCE OF MEMBERS AND THE MEETING ALLOWANCE AMOUNTS FOR THE RISK MANAGEMENT COMMITTEE MEETINGS IN
THE FISCAL YEAR 2023-24 ARE AS FOLLOWS:

MEETINGS ATTENDED/ MEETING ALLOWANCE

S.N. NAMES OF RISK MANAGEMENT COMMITTEE MEMBERS
TOTAL (NPR)

1 Narendra Kumar Agrawal, Director, Convener 8/8 112,000

2 Dinesh Shankar Palikhe, Director, Member 8/8 112,000

3 Pravin Nidhi Tiwari,Head- Operating Officer, Member 8/8 -

4 Shailaja Gyawali, Chief Integrated Risk Officer, Member Secretary 8/8 -

 In the fiscal year 2023-24, no director member was absent from any of the Risk Management Committee meetings.

 No officials from management were provided with meeting allowances for attending the Risk Management Committee
meetings.

ANNUAL
156 REPORT 2023-24
EMPLOYEES SERVICE & FACILITY COMMITTEE
In accordance with Directive No. 6 of the Integrated Guidelines issued by Nepal Rastra Bank, the Employees Service & Facility
Committee is operational in the Bank. The members of this committee are as follows:

S.N. NAMES OF EMPLOYEES SERVICE & FACILITY COMMITTEE MEMBERS POSITION

1 Rahul Agrawal, Director Convener
2 Ankit Kedia, Director Member
3 Sundar Prasad Kadel, Chief Executive Officer Member
4 Rameshwar Prasad Basyal, Deputy Chief Executive Officer Member
5 Pankaj Pant, Head- Human Resource Department Member Secretary

TERMS OF REFERENCE OF THE COMMITTEE ARE AS FOLLOWS KEY TOPICS DISCUSSED, REVIEWED, AND DECIDED DURING THE REVIEW
 To provide necessary assistance to the Board of Directors PERIOD INCLUDE
in drafting the institution’s ‘Compensation Determination  Update on the Bank Employees Association’s demands for
Policy.’ 2023-24.

 The committee will periodically study and analyze  Detailed review of the Bank’s human resource activities
the entire compensation structure of employees and from mid July 2023 to mid December 2023.
regularly assess the impact of changes in the market’s
compensation structure on the institution, reporting its  Discussion on the draft of the new SOP and policies of the
findings to the Board of Directors. Human Resources Department.

 If an increase in compensation for all employees,  Discussion on the collective agreement between
including the Chief Executive Officer, is deemed necessary Siddhartha Bank Ltd. and the Bank Employees Association.
based on the institution’s ‘Compensation Determination
Policy,’ the committee will recommend such an increase,  Discussion on the Voluntary Retirement Scheme (VRS)
supported by relevant justifications, to the Board of proposal.
Directors.
 Discussion on the approval of the Employee Service
 Develop work descriptions, goals, and progress evaluation Regulations by the central bank.
indicators for employees and review the employee
performance evaluation system accordingly.  Review of the salary scale for Assistant Managers and
higher-level employees.
 Prepare and present plans, policies, and criteria related
to human resource management activities such as  Discussion on including Electric Vehicles (EVs) in the
recruitment, selection, appointment, placement, transfer, employee vehicle loan scheme.
promotion, career development, performance evaluation,
rewards and penalties, and labor relations to the Board of  Review of allowances for employees working abroad.
Directors.
 Discussion on the performance evaluation system.
 Review the employee policy and the structure of the
active workforce, and recommend Succession Planning  Discussion on significant changes in the employee vehicle
for approval by the Board of Directors. loan scheme.

 The Chief Executive Officer will not be allowed to  Discussion on proposed amendments to the Employee
participate in committee meetings discussing matters Service Regulations.
related to their own service benefits.
In the fiscal year 2023-24, a total of 7 meetings of the
Employees Service & Facility Committee were held. These
meetings were held on the following dates: 11 October 2023,
29 December 2023, 9 January 2024, 2 February 2024, 21 May
2024, and 7 June 2024.

ANNUAL 157
REPORT 2023-24
 The details of the attendance of members and the meeting allowance amounts for the Employees Service & Facility
Committee meetings in the fiscal year 2023-24 are as follows:

NAMES OF EMPLOYEES SERVICE & FACILITY COMMITTEE

S.N. MEETINGS ATTENDED/TOTAL MEETING ALLOWANCE (NPR)
MEMBERS
1 Rahul Agrawal, Director, Convener 7/7 98,000

2 Ankit Kedia, Director, Member 7/7 98,000

3 Sundar Prasad Kadel, Operating Officer, Member 6/7 -

Rameshwar Prasad Basyal, Deputy Chief Executive

4 7/7 -
Officer, Member
Pankaj Pant, Head- Human Resources Department,
5 7/7 -
Member Secretary

In the fiscal year 2023-24, no director member was absent from any of the Employees Service & Facility Committee meetings.
No officials from management were provided with meeting allowances for attending the Employees Service & Facility
Committee meetings.

ANTI-MONEY LAUNDERING/COMBATING THE FINANCING OF TERRORISM (AML/CFT) COMMITTEE

In accordance with Directive No. 6 of the Integrated Guidelines issued by Nepal Rastra Bank, the Anti-Money Laundering/
Combating the Financing of Terrorism (AML/CFT) Committee is operational in the Bank. The members of this committee are as
follows:

S.N. NAMES OF AML/CFT COMMITTEE MEMBERS POSITION

1 Mina Kumari Sainju, Director Convener

2 Ankit Kedia, Director Member

3 Shailaja Gyawali, Chief Integrated Risk Officer Member

4 Saroj Kafle, Head-Compliance & Corporate Governance Member

5 Chandan Gupta Rauniyar, Head-AML/CFT Member Secretary

TERMS OF REFERENCE OF THIS COMMITTEE ARE AS FOLLOWS:

 Review the actions and proceedings conducted in  Present a quarterly report to the Board of Directors on
accordance with the Money Laundering Prevention Act, compliance and implementation of the relevant laws,
2007, the Money Laundering Prevention Regulations, 2016, regulations, directives from Nepal Rastra Bank, and the
and Directive No. 19 issued by Nepal Rastra Bank, and Bank’s internal policies concerning financial investments
present a report to the Board of Directors. related to money laundering and terrorist activities.

 Discuss and implement necessary policy arrangements  Review and discuss reports/information received from
related to the internal policies, procedures, and processes management and provide necessary suggestions to the
drafted and implemented by the Bank in accordance with Board of Directors as required.
the Money Laundering Prevention Act, 2007, the Money
Laundering Prevention Regulations, 2016, directives issued g AML/CFT Risk Management Report.
by Nepal Rastra Bank, and any recommendations made
by FATF (Financial Action Task Force) guidelines. g Updated status of customer identification, details of
the Customer Due Diligence (CDD) process, details of
 Discuss the adequacy of procedural aspects adopted Politically Exposed Persons (PEPs), and details of the
and to be adopted, and the information technology Enhanced Customer Due Diligence (ECDD) process,
systems used for identifying and preventing financial along with the description of the policy, procedural,
investments related to money laundering and terrorist and institutional improvements to be adopted in the
activities and provide recommendations to the Board of future to make these processes quicker, more efficient,
Directors for necessary improvements. and more effective through the use of information
technology.
 Analyze the customer identification system and ensure
the implementation of customer identification and g Review of the observations related to financial
customer acceptance policies (Risk-based Classification), investments in money laundering and terrorist activities
especially focusing on high-ranking individuals and mentioned in internal audits, external audits, and Nepal
ultimate beneficiaries.

ANNUAL
158 REPORT 2023-24
 DURING THE REVIEW PERIOD, THE ASSET LAUNDERING PREVENTION
Rastra Bank’s inspection reports, along with a detailed COMMITTEE PRIMARILY DISCUSSED, REVIEWED, AND MADE DECISIONS
description of the necessary policy and procedural ON THE FOLLOWING TOPICS:
improvements required in this regard.
 Review and discussion of the annual plan of the AML/CFT
 When the Bank initiates new services/facilities, purchases
department for the fiscal year 2023-24.
technology (hardware/software), conducts wire transfers,
engages in e-banking/mobile banking (including mobile
 Discussion on the implementation status of AML/CFT and
wallet transfers), conducts transactions through other
PEP compliance activities for the fourth quarter of FY 2022-
online/offline means, a detailed analysis of the risks
23 and the first, second, and third quarters of FY 2023-24.
related to money laundering and terrorist financing in
these transactions and necessary policy and procedural
 Discussion on the risk assessment and evaluation reports
improvements for their management will be required.
for the fourth quarter of FY 2022-23 and the first, second,
and third quarters of FY 2023-24.
 Analyze issues/events related to financial investments in
money laundering and terrorist financing at the national
 Review of the number of border transactions/suspicious
and international levels, assess the potential impact on
transactions and related trends for the fourth quarter of
the Bank, and propose necessary policy measures for risk
FY 2022-23 and the first, second, and third quarters of FY
management to be presented to the board of directors.
2023-24.

 Organize a knowledge transfer program on anti-money

 Discussion on budget allocation and approval in
laundering (AML) for implementing officers, shareholders
accordance with Nepal Rastra Bank’s Unified Directive No.
owning 2% or more of the Bank’s paid-up capital, board
06/080, Section 7 (5)(d).
members, senior management, and employees regularly
involved in AML-related activities.
 Review and discussion of the money laundering (AML) and
terrorist financing (CFT) issues raised in the internal audit,
 Regularly review the Bank’s internal policy arrangements
external audit, and inspection reports.
and guidelines related to money laundering and terrorist
financing and propose suggestions on their adequacy to
 Analysis, review, and discussion of money laundering and
the board of directors.
terrorist financing incidents and their potential impact on
the institution in both national and international domains.
 Ensure discussions in the board of directors regarding the
effective functioning of the AML system, appropriate risk
 Discussion on KYC (Know Your Customer) and AML/CFT
management, proper monitoring of unusual activities,
policies.
and the submission of necessary reports to the relevant
authorities.
 Review and discussion of the financial risks associated
with money laundering and terrorist financing when new
 Ensure that financial reports and information required
services/facilities are introduced, and new contracts,
to be submitted to the relevant authorities by the
policies, procedures, or directives are issued/updated
Financial Information Unit (FIU) and Nepal Rastra Bank, in
during the first, second, and third quarters of FY 2023-24.
accordance with the Anti-Money Laundering Act, 2064
(Section 44k), are properly reviewed and discussed,
 Discussion on risk identification and evaluation reports
without any violation of the provisions mentioned in the
related to AML/CFT in FY 2022-23, including customer,
Act.
service, geographical areas, and delivery channels.

 The bank should prepare an annual budget and

 Presentation and discussion on the Mutual Evaluation
programs based on the risks related to the prevention of
Report (MER) of Nepal published by the Asia Pacific Group
financial investments in money laundering and terrorist
(APG) in September 2023.
financing, which will be reviewed and approved by the
board. The committee will be responsible for ensuring
 Discussion on the implementation status of Nepal Rastra
effective implementation and conducting regular
Bank’s ‘AML/CFT Targeted Special Inspection Report,
monitoring.
September 2022’.

ANNUAL 159
REPORT 2023-24
 In FY 2023-24, a total of 5 meetings of the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)
Committee were held, from meeting no. 23 to meeting no. 27. These meetings were held on the following dates: 28 August
2023, 10 October 2023, 28 December 2023, 1 April 2024, and 6 June 2024.

ATTENDANCE AND MEETING ALLOWANCE DETAILS OF THE MEMBERS FOR THE AML/CFT COMMITTEE MEETINGS IN FY 2023-24 ARE AS FOLLOWS:

MEETINGS ATTENDED/ MEETING ALLOWANCE

S.N. NAMES OF AML/CFT COMMITTEE MEMBERS
TOTAL (NPR)

1 Mina Kumari Sainju, Independent Director, Convener 5/5 70,000

2 Ankit Kedia, Director, Member 5/5 70,000

3 Shailaja Gyawali, Chief Integrated Risk Officer, Member 5/5 -

4 Saroj Kafle, Head- Compliance & Corporate Governance, Member 5/5 -

5 Chandan Gupta Rauniyar, Head - AML/CFT, Member Secretary 5/5 -

 In the fiscal year 2023-24, no board members were of mutual funds in Nepal. Following the successful
absent from the meetings of the Anti-Money Laundering management of mutual funds, the company entered the
Prevention Committee. merchant banking business in 2015 A.D., offering services
such as public issue management, underwriting, portfolio
 No executive members participating in the Anti-Money management, institutional advisory services, depository
Laundering Prevention Committee meetings on behalf participant services, and share registrar-related services.
of the management have been provided meeting Additionally, the company has been functioning as the share
allowances. registrar for the Bank.

Changes in Senior Management and Their Reasons Siddhartha Capital Limited has obtained a license from the
During the review period, there were no changes in positions Nepal Securities Board (SEBON) and CDS & Clearing Limited
at the level of Assistant General Manager or above. to operate as a depository participant. It provides depository
participant services through all branch offices of Siddhartha
Core Functions of the Subsidiary Company, Siddhartha Bank Limited as well as its own offices. The company has
Capital Limited successfully established itself as a preferred institution for
comprehensive capital market services in Nepal. Siddhartha
Siddhartha Capital Limited is a subsidiary of the Bank. The Capital Limited remains committed to enhancing customer
company has a paid-up capital of NPR 200 million, with 51% satisfaction, strengthening organizational capabilities,
ownership held by the Bank. and fulfilling the growing demand for investment banking
services in Nepal.
Commencing operations on 28 September 2012, Siddhartha
Capital Limited has played a pivotal role in the development

ANNUAL
160 REPORT 2023-24
CHAIRMAN’S REVIEW REPORT ON THE OVERALL PERFORMANCE OF THE
BOARD AND EFFECTIVENESS IN ACHIEVING THE BANK’S OBJECTIVES

ACHIEVEMENTS AND FUTURE PLANS

The bank has made significant strides in enhancing POS and E-commerce is contributed to the women’s
its service offerings, focusing on providing a seamless health welfare. Technological advancements
and efficient banking experience for customers. Under continue, with the implementation of systems like
the guidance of the Board of Directors, the Bank Business Process Automation, Audit Management,
successfully integrated various services, such as locker and Business Intelligence tools to improve operational
facilities, debit/credit cards, and loan products, into a efficiency and decision-making.
single, streamlined platform, improving convenience
for our customers. This year, the Bank introduced the The bank has also significantly upgraded its
‘Siddhartha Bank Gen Z Account’ to target younger infrastructure, with the completion of a new state-of-
customers, encouraging digital transactions among the-art head office in Naxal, Kathmandu. This facility
minors and their guardians. will better support our technology-driven services
and improve our overall service delivery. Going
Additionally, the ‘Siddhartha Bank Nari Bachat Khata’ forward, the Bank will continue to focus on expanding
(Women’s Savings Account) continues to cater to its digital banking ecosystem, increasing customer
the unique financial needs of female customers, engagement, and ensuring sustainable growth
offering specialized benefits like preferential loan through strategic lending and effective loan recovery.
rates and Nari debit/credit cards. To further support
women’s financial empowerment, the Bank plans to FINANCIAL PERFORMANCE AND BOARD OVERSIGHT
integrate women entrepreneurship loans into this Despite a challenging global economic environment,
account. The Board has supported these initiatives, the Bank posted strong financial results, with a net
while operational teams have worked diligently to profit of NPR 3.08 billion for the fiscal year 2023-24.
implement them effectively. As fiscal year 2023-24, the Bank’s total deposits
amounted to NPR 255.91 billion, and the loan portfolio
The bank has also continued its efforts to promote reached NPR 203.54 billion. While the increase in non-
financial literacy through digital literacy programs performing loans (NPLs) presents a challenge, the
in schools, colleges, and institutions. Expanding the Bank has implemented proactive measures, under
network of partner outlets offering exclusive discounts the Board’s guidance, to manage these risks and
to customers is another initiative driven by the Bank’s ensure financial stability. Moving forward, the Bank
ongoing efforts to provide added value. As part of the will continue focusing on quality lending and prudent
Digital First strategy, the Bank has been focusing on financial management.
increasing digital banking adoption through various
campaigns and innovations such as the ‘Siddhartha
GOVERNANCE AND COMPLIANCE
Rewards’ loyalty program. The program allows
The Board remains committed to maintaining high
customers to earn rewards for digital transactions,
standards of corporate governance, ensuring that the
fostering greater engagement.
Bank operates in compliance with applicable laws and
regulations. The Board oversees the implementation
Furthermore, the Bank has expanded its technology-
of governance practices focused on transparency,
based services, including 24/7 banking through Cash
accountability, and ethical conduct. Regular reviews
Deposit Machines (CDM) and Cheque Deposit Kiosks.
of internal policies and regulations are conducted
The introduction of the ‘Nari Debit Card’ is another step
to ensure alignment with evolving regulatory
to directly support women’s health and empowerment
requirements.
initiatives, where 0.10% of transactions made through

ANNUAL 161
REPORT 2023-24
 Additionally, the Bank has continued to in leadership programs, such as the
implement robust governance practices, Advanced Leadership Program (ALP),
including the Director’s Code of Conduct, to strengthen strategic thinking and
which ensures that all directors adhere to innovation in the financial sector.
ethical standards. Clear internal control
mechanisms are also in place to maintain CONCLUSION
accountability at all levels of the Bank. The Board of Directors has effectively
supported and overseen the Bank’s
DIRECTOR CONDUCT AND strategic initiatives, ensuring that
PROFESSIONAL DEVELOPMENT strong governance standards are
The bank’s directors are held to high consistently upheld. By focusing on
ethical standards, as outlined in the digital transformation, enhancing
Director’s Code of Conduct. They customer satisfaction, and practicing
are required to submit annual self- responsible financial management, the
declarations regarding their financial Bank is well-positioned for long-term
interests, which are reviewed to ensure success. The collective efforts of the
transparency and avoid conflicts of Board, management, and staff have
interest. been crucial in navigating challenges
and capitalizing on growth opportunities.
The Board values continuous professional Together, we remain committed to
development, with directors participating delivering sustainable value to all
in various training programs on corporate stakeholders, ensuring the continued
governance, anti-money laundering success and stability of the Bank.
(AML), combating the financing of
terrorism (CFT), and other regulatory Manoj Kumar Kedia
requirements. Directors also take part Chairman

ANNUAL
162 REPORT 2023-24
BOARD PERFORMANCE EVALUATION PROCESS
ANNUAL APPRAISAL OF BOARD PERFORMANCE
The Board of Directors of Siddhartha Bank Limited Board Committees, and individual Board members. This
acknowledges the significant role that the performance evaluation is conducted every six months, ensuring regular
of both the Board and its Committees plays in ensuring and comprehensive oversight of the Bank’s governance and
the Bank’s success and protecting the interests of its strategic direction.
shareholders. In line with the best corporate governance
practices and regulatory requirements, the Board, along EVALUATION PROCESS
with its committees, undertakes an annual review and  The Board Evaluation Meeting is held bi-annually generally
assessment of its overall effectiveness. in every six months, with the exclusive participation
of Board members to maintain objectivity and
This comprehensive evaluation process is designed to independence.
measure the performance, objectives, responsibilities,
processes, and procedures of the Board, each Committee,
 The agenda of the last review meeting of the Board of
and individual directors. By doing so, Siddhartha Bank
Directors held on 27 March 2023 were:
ensures that the governance framework remains robust,
efficient, and aligned with the strategic goals of the g Performance Review of the Bank and CEO of FY 2022-23
institution.
g Brief Review of Board and Board-Level Committees
The evaluation is led by the Chairman, with active
participation from the Company Secretary and the g Brief Review on Corporate Governance and Risk
respective Committee Conveners. The process not only
Management of the Bank
assesses past performance but also identifies key areas for
improvement, ensuring that the Board and its Committees g Anti-Money Laundering and Counter Financing of
function optimally to drive the Bank’s growth and
Terrorism (AML/CFT)
sustainability.
g Self-Evaluation of the Board
Through this structured and transparent evaluation
mechanism, Siddhartha Bank strives to uphold the highest
 As part of the evaluation, Board members conduct a self-
standards of corporate governance, ensuring accountability,
evaluation using a structured questionnaire.
transparency, and efficiency in decision-making. This
commitment ultimately contributes to the Bank’s long-  This process allows members to reflect on their individual
term success and enhances shareholder value, reinforcing contributions, collective governance effectiveness, and
investor confidence in the Bank’s leadership and operational areas for improvement.
integrity.
This structured approach reinforces the Bank’s dedication to
Siddhartha Bank Limited follows a structured and formal transparency, accountability, and sustainable growth.
evaluation process to assess the performance of its Board,

ANNUAL 163
REPORT 2023-24
 MANAGEMENT LEVEL COMMITTEES
To establish an effective internal control system, comprehensive risk management, efficient supervision, timely and
effective decision-making, and institutional governance within the Bank, several management-level committees are
actively functioning. These include the Executive Committee, Managerial Credit Committee, Asset and Liability Management
Committee, Managerial Loan Recovery Committee, Managerial Loan Write-Off Sub-Committee, Financial Steering Committee,
Procurement Committee, Asset Disposal Committee, and Operational Risk Management Committee, among others.

EXECUTIVE COMMITTEE
The Executive Committee was formed on 28 June 2018, under the coordination of the Chief Executive Officer (CEO), comprising
senior management personnel from the executive group. The current members of the committee are as follows:

S.N. NAME OF EXECUTIVE COMMITTEE MEMBERS DESIGNATION

1 Sundar Prasad Kadel, Chief Executive Officer Convener

2 Rameshwar Prasad Bashyal, Deputy Chief Executive Officer Member

3 Sher Bahadur Budhathoki, Assistant Chief Executive Officer Member

4 Arjun Bhadra Khanal, Chief Credit Underwriting Officer Member Secretary

5 Srijan Krishna Malla, Chief Information Technology Officer Member

6 Suresh Raj Maharjan, Chief Marketing Officer Member

7 Prashanna Khadka, Chief Corporate Banking Officer Member

8 Shailaja Gyawali, Chief Integrated Risk Officer Member

9 Manohar KC, Chief Retail Banking Officer Member

10 Pradeep Pant, Chief MSME Banking Officer Member

During the review period, Mr. Prashanna Khadka served as the Member Secretary of the Executive Committee. However,
effective from 17 July 2024, Mr. Arjun Bhadra Khanal has assumed the position.

During the review period, the Executive Committee convened  Loan rescheduling and restructuring.
a total of 14 meetings, primarily discussing the following key
matters:  Comparative analysis of quarterly financial statements of
various banks.
 Monetary policy issued by Nepal Rastra Bank (NRB) for FY
2023-24.  Comparative analysis of Fee-Based Income of different
banks and review of the Bank’s Standard Tariff of Charges
 NRB Onsite Inspection Report. (STC).

 The Bank’s five-year strategic plan.  The bank’s quarterly performance review.

 Interest subsidy loan directives.  Strategies to reduce the Turnaround Time (TAT) in the
credit approval process.
 SME Eco-System framework.
 Review of the Corporate Governance Policy and
 Annual budget of the Bank for FY 2023-24. Disclosure Policy.

 Management of non-performing loans (NPL) and  Amendments to various product papers of the Bank.
outstanding interest receivables.
 Implementation of a Loyalty Management Program.
 Implementation of Capital-Based Pricing in loan
disbursement.  Employee leave benefits in line with the Revised Employee
Regulations.
 Working Capital Guidelines and various circulars and
directives issued by Nepal Rastra Bank.  Strategies to enhance Fee-Based Income.

 Training and capacity development programs for  Review and amendments to various policies of the Bank.
Province and Circle Heads and other employees.

ANNUAL
164 REPORT 2023-24
MANAGEMENT CREDIT COMMITTEE
To streamline and expedite the loan approval process, the Management Credit Committee was formed on 28 June 2021 under
the coordination of the Chief Executive Officer (CEO). The current members of the committee are as follows:

S.N. NAME OF MANAGEMENT CREDIT COMMITTEE MEMBERS DESIGNATION

1 Sundar Prasad Kadel, Chief Executive Officer Convener

2 Rameshwar Prasad Bashyal, Deputy Chief Executive Officer Member

3 Sher Bahadur Budhathoki, Assistant Chief Executive Officer Member

4 Arjun Bhadra Khanal, Chief Credit Underwriting Officer Member

5 Prashanna Khadka, Chief Corporate Banking Officer Member

6 Laxman Ghimire, Company Secretary Member Secretary

*Effective from 21 August 2023, Arjun Bhadra Khanal, Chief Credit Underwriting Officer of the Bank, has been serving as a
member of this committee.

The Terms of Reference (TOR) of the committee are as  Integrated Risk Review Report for FY 2022-23.
follows:
 Reorganization of the Management Credit Committee.
 Conduct a review of the Bank’s Credit Policy every two
years.  Proposal routing mechanism through the Credit
Underwriting Function.
 Assess and monitor the credit portfolio, including loan
exposure, sector-wise concentration, non-performing  Portfolio Trend Analysis.
loan (NPL) status, and other credit risk-related aspects.
 Sector-wise Industry Comparison as of 2023 Mid July
 Supervise compliance with external regulations and
the Bank’s Credit Policy concerning loan classification,  Initiatives to focus on Priority Sector Lending (Micro
loan structuring, loan diversification, and credit risk Segment Loans up to NPR 10 million).
management.
 Modification of the Credit Memorandum format used by
 Evaluate overall credit risk, including credit concentration the Management Credit Committee.
risk, portfolio composition, and loan quality, and submit
timely reports to the Board of Directors.  Approval of the Standard Operating Procedure (SOP) for
Stock Inspection.
 Periodically review the credit portfolio to ensure that the
associated risks remain within the Bank’s risk appetite and  Approval of new valuator enlistment, renewal of existing
tolerance levels. valuators, and delisting of outdated valuators.

 Review and discussion of the Department Profile of the

During the review period, the Management Credit
Credit Underwriting Division, Version 1 (2023).
Committee held a total of 50 meetings, primarily discussing
the following key matters:
 Review and discussion of the Standard Operating
Procedures of Credit Underwriting, Version 1.
 Review, discussion, approval, and endorsement of various
credit proposals.
 Review of the Bank’s energy sector portfolio.

ANNUAL 165
REPORT 2023-24
 ASSET AND LIABILITY MANAGEMENT COMMITTEE
The Asset and Liability Management Committee has been established to facilitate regular discussions and decision-making
on key market risks, including asset-liability management (ALM), foreign exchange risk, liquidity risk, and interest rate risk. The
committee actively monitors and ensures necessary internal controls in these areas. The following members currently serve
on the committee:

S.N. NAME OF ASSET AND LIABILITY MANAGEMENT COMMITTEE MEMBERS DESIGNATION

1 Sundar Prasad Kadel, Chief Executive Officer Convener

2 Rameshwar Prasad Bashyal, Deputy Chief Executive Officer Member

3 Sher Bahadur Budhathoki, Assistant Chief Executive Officer Member

4 Arjun Bhadra Khanal, Chief Credit Underwriting Officer Member

5 Prashanna Khadka, Chief Corporate Banking Officer Member

6 Manohar KC, Chief Retail Banking Officer Member

7 Pradeep Pant, Chief MSME Banking Officer Member

8 Jit Bahadur Adhikari, Head Transaction Banking and International Business Member

9 Pramesh Shrestha, Head Strategy and Finance Member

10 Arpana Giri, Head- Liabilities (Institutional and HNI) Member

11 Shishir Hari Rajbhandari, Head Treasury and Investment Banking Member Secretary

During the review period, the Asset and Liability Management Committee  Evaluation of the Bank’s loan and deposit
(ALCO) held a total of 23 meetings, where discussions primarily focused portfolio.
on the following key matters:
 Discussion on debt security issuance.
 Review, discussion, and decision-making regarding interest rate
revisions/modifications.  Analysis of the Bank’s annual budget.

 Review of the Bank’s investment, asset, and liability management  Review of the Bank’s existing policies.
(ALM) policies.

 Assessment of sources and utilization of funds in both Nepalese

MANAGEMENT LEVEL LOAN
Rupees and foreign currencies. RECOVERY COMMITTEE
To facilitate the loan recovery process, the
 Review of the Bank’s investment and business strategy. Board of Directors (BoD), in its 290th meeting
held on 5 April 2018, decided to establish
 Discussion on new savings schemes and debt security issuance. a Management Level Loan Recovery
Committee under the chairmanship of the
 Review of stress testing results.
Chief Executive Officer (CEO). The committee
 Periodic assessment of asset and liability management (ALM). has been authorized, as per the Loan
Recovery Guidelines, to make appropriate
 Borrowing from foreign banks and financial institutions in convertible decisions, including auctioning, for the
foreign currency. recovery of loans up to NPR 250 million (NPR
25 crore), including principal, interest, and
 Review of inter-branch cost allocation in Nepalese Rupees (NPR) and
US Dollar (USD) transactions. other charges.

 Investment in government bonds and other monetary instruments. Furthermore, based on the resolutions
passed in the 290th (26 March 2018), 327th
 Market and competitor bank analysis.
(24 October 2019), and 421st (6 December
2023) meetings of the Board of Directors,
 Investment in seed capital of mutual funds issued by the Bank’s
subsidiary company. the Management Level Loan Recovery
Committee has been granted the authority
 Discussion on strategies for investment, purchase, and sale of equities to take actions under the regulatory
and mutual funds. framework of Nepal Rastra Bank’s Unified
Directives related to Non-Banking Assets
 Review of monetary policy.
(NBA) acquisition, write-off provisions, and
 Discussion on daily liquidity management facilities. auction sales in accordance with the Bank’s
Loan Recovery Policy. This authority is subject
 Review of the Bank’s trade finance business. to the following conditions:

 Analysis and review of the Bank’s financial position.

ANNUAL
166 REPORT 2023-24
 The value of Non-Banking Assets (NBA) to be acquired and sold must not exceed NPR 50 million (NPR 5 crore).

 The market value of the collateral at the time of acquisition must be higher than the outstanding recoverable amount of
the Bank.

 The acquisition process must not lead to an accounting loss requiring provisioning.

 The acquired assets can be auctioned or sold at a price equal to or higher than the acquisition value.

 The committee is authorized to facilitate the ownership transfer of auctioned properties to the highest bidder and make
other necessary decisions regarding asset disposal.

 The details of acquired and sold non-banking assets must be reported to the Board of Directors in the next scheduled
meeting following the decision.

The committee comprises the following members:

S.N. NAME OF MANAGEMENT LEVEL LOAN RECOVERY COMMITTEE MEMBERS DESIGNATION

1 Sundar Prasad Kadel, Chief Executive Officer Convener

2 Rameshwar Prasad Bashyal, Deputy Chief Executive Officer Member

3 Sher Bahadur Budhathoki, Assistant Chief Executive Officer Member

4 Anindra Raj Acharya, Head- Special Asset Cell Member

5 Gokul Sapkota, Manager – Legal Member

6 Dipak Wagle, Manager- Special Asset Cell Member Secretary

During the review period, a total of 41 meetings of the Management Loan Recovery Committee were held. These meetings
primarily discussed the following matters:

 Taking appropriate decisions, including auctioning, for the recovery of loans up to NPR 2.5 billion (including principal,
interest, and other charges) as per the Loan Recovery Guidelines.

 Filing cases at the Debt Recovery Tribunal for the recovery of outstanding loans that could not be recovered through
auction.

 Recommending to the Board of Directors for the acceptance of non-banking assets, if necessary.

 Selling non-banking assets and informing the Board of Directors accordingly.

MANAGEMENT LEVEL LOAN WRITE-OFF SUB COMMITTEE

The Management Level Loan Write-off Sub Committee is authorized to write off loans with a principal amount of up to NPR
250,000 and waive up to 50% of the outstanding interest or a maximum of NPR 1,000,000, whichever is lower. However, if
the amount to be written off or waived exceeds this limit, the matter shall be recommended to the Board of Directors for
necessary decision-making.

The Loan Write-off Sub Committee comprises the following members:

S.N. NAME OF MANAGEMENT LEVEL LOAN WRITE-OFF SUB COMMITTEE MEMBERS DESIGNATION
1 Sundar Prasad Kadel, Chief Executive Officer Convener
2 Rameshwar Prasad Bashyal, Deputy Chief Executive Officer Member
3 Sher Bahadur Budhathoki, Assistant Chief Executive Officer Member
4 Anindra Raj Acharya, Head Special Asset Cell Member
5 Gokul Sapkota, Manager Legal Member
6 Dipak Wagle, Manager Special Asset Cell Member Secretary

During the review period, a total of 16 meetings of the Loan Write-off Sub Committee were held.

ANNUAL 167
REPORT 2023-24
 FINANCIAL DIRECTION COMMITTEE
The Bank has formulated and implemented the Financial Administration Regulations, 2080. The Financial Direction Committee
is actively functioning within the Bank. The committee comprises the following members:

S.N. NAME OF FINANCIAL DIRECTION COMMITTEE MEMBERS DESIGNATION

1 Sundar Prasad Kadel, Chief Executive Officer Convener

2 Rameshwar Prasad Bashyal, Deputy Chief Executive Officer Member

3 Srijan Krishna Malla, Chief Information Technology Member

4 Suresh Raj Maharjan, Chief Marketing Officer Member

5 Pravin Nidhi Tiwari, Head-Operating Officer Member

6 Pramesh Shrestha, Head-Strategy and Finance Member

7 Deependra Paudel, Manager-General Administration Department Member Secretary

During the review period, a total of 25 meetings of the Financial Direction Committee were held. These meetings primarily
discussed the following matters:

 Selection of bids for the procurement and installation of equipment in various branches of the Bank.

 Selection of service providers for outsourcing security and cleaning services for the Bank.

 Financial assistance for the production of an awareness short film on digital fraud, scams, and banking crimes as part of
the Bank’s Corporate Social Responsibility (CSR) initiatives.

 Procurement of an operation theater table for Pokhara University Teaching Hospital, Kaski, under the Bank’s CSR initiatives.

 Selection of an insurance company for the annual insurance coverage of the Bank’s assets.

 Selection of an insurance company for the annual medical and accident insurance of all bank employees.

 Selection of an insurance company for renewing depositors’ insurance based on different banking product features.

 Selection of bids for the procurement of network equipment and server upgrades.

 Selection of bids for the procurement of software, backup solutions (BTS), and firewall security systems.

 Procurement of an ambulance for Siddhartha Children’s and Women’s Hospital under the Bank’s CSR initiatives.

OPERATION RISK MANAGEMENT COMMITTEE

The Operational Risk Management Committee is actively functioning within the Bank. The committee comprises the following
members:

S.N. NAME OF OPERATION RISK MANAGEMENT COMMITTEE MEMBERS DESIGNATION

1 Sundar Prasad Kadel, Chief Executive Officer Convener

2 Shailaja Gyawali, Chief Integrated Risk Officer Member Secretary

3 Srijan Krishna Malla, Chief Information Technology Member

4 Suresh Raj Maharjan, Chief Marketing Officer Member

5 Pankaj Pant, Head Human Resources Member

6 Pravin Nidhi Tiwari, Head Operating Officer Member

7 Saroj Kafle, Head Compliance & Corporate Governance Member

8 Chandan Gupta Rauniyar, Head AML/CFT Member

9 Sajesh Chapagain, Assistant Operation Risk Manager Member

ANNUAL
168 REPORT 2023-24
The Terms of Reference (ToR) of this committee are as  Evaluation of operational risks in digital processes and
follows: identification of process gaps by the Operational Risk
 Monitor, manage, and report operational risks. Department.

 Function within the guidelines and standards set by the  Coordination with relevant departments to establish
Board of Directors. acceptable Risk Tolerance Limits for various departments
as determined by the Operational Risk Department.
 Implement risk-related mechanisms and strategies and
provide updates accordingly. PROCUREMENT COMMITTEE
The Procurement Committee is actively functioning within
 Review and assess the Bank’s risk profile based on
the Bank. The committee comprises the following members:
operational risks.

 Review operational risk policies and reassess risk limits. S.N.

NAME OF PROCUREMENT COMMITTEE
DESIGNATION
MEMBERS
 Inspect and evaluate new and complex processes, 1 Pravin Nidhi Tiwari, Head- Operating Member
products, and system models. Officer

 Review the institution’s risk model in alignment with 2 Gyanendra Karki, Head- Central Permanent
developments and amendments in the Banking sector Operations Invitee
and regulations. Member

 Identify potential risks and undertake appropriate risk 3 Jit Bahadur Adhikari, Head-
management measures. Transaction Banking and Member
International Business
 Implement suitable systems for operational risk
management. 4 Pramesh Shrestha, Head- Strategy
and Finance Member

 Regulate and oversee operational risk and compliance-

5 Udaya Tegi Tuladhar, Manager-
related matters.
Information Communication Member
Technology
 Inspect the activities carried out by the Operations
Department from a compliance perspective.
6 Deependra Paudel, Manager- Member
General Administration Department Secretary
 Implement an appropriate internal control system as
required.
During the review period, a total of 62 meetings of the
 Review the Disaster Risk Reduction Policy. Procurement Committee were held. The primary discussions
in these meetings were as follows:
During the review period, a total of three meetings of the
 Selection of bids for the procurement of Digital Signage,
Operational Risk Management Committee were held. These
Chip Cards, Budget Management Solution, AML/CFT and
meetings primarily discussed the following matters:
FRMS Solution, and Robotic Process Automation Solution.
 Assessment and discussion on potential risks to the Bank’s
 Selection of service providers for the procurement of IS
operations and transactions arising from incidents and
Audit and Vulnerability Assessment & Penetration Testing
trends in the Banking sector.
(VAPT).
 Analysis of events recorded in the Bank’s risk register,
 Procurement of table and wall calendars for the New Year
including discussions on the incident location, duration,
2081.
risk sources, inspection responsibilities, and internal
control records.
 Selection of bids for the procurement of Automated
Teller Machines (ATM), Cheque Deposit Kiosks, Cash
 Review and discussion on rectifying deficiencies identified
Deposit Machines, and Biometric Devices for various bank
in internal and external audits, as well as compliance with
branches.
directives issued by Nepal Rastra Bank (NRB).

 Recommendation for the selection of service providers

 Review and discussion on the department’s detailed
for the outsourcing of Security Services and Support
activities conducted for identifying, assessing, and
Manpower/Services.
monitoring compliance risks as per NRB Directive 19/080.

 Listing of suppliers and service providers for stationery

 Examination of the identified risks and proposed control
and printing, travel and ticketing, internal construction
mechanisms outlined in the Operational Risk Assessment
and decoration, courier services, and other essential
Report.
banking services.
 Discussion on the NRB compliance report for FY 2022-23 in
line with NRB Directive 2080.

ANNUAL 169
REPORT 2023-24
 ASSETS DISPOSAL COMMITTEE
The Assets Disposal Committee is actively functioning within the Bank. The committee comprises the following members:

S.N. NAME OF ASSETS DISPOSAL COMMITTEE MEMBERS DESIGNATION

1 Pravin Nidhi Tiwari, Head- Operating Officer Convener
2 Gyanendra Karki, Head- Central Operations Member
4 Pramesh Shrestha, Head- Strategy and Finance Member
6 Deependra Paudel, Manager- General Administration Department Member Secretary

During the review year, a total of two meetings of the Assets Disposal Committee were held. The primary discussions in these
meetings were as follows:

 Recommendation for the disposal of four-wheeler vehicles from the Bank’s central office and Biratnagar branch.

 Recommendation for the disposal of a four-wheeler vehicle from the Dhangadhi branch.

RECORD DISPOSAL COMMITTEE

The Record Disposal Committee is actively functioning within the Bank. The committee comprises the following members:

S.N. NAME OF RECORD DISPOSAL COMMITTEE MEMBERS DESIGNATION

1 Pravin Nidhi Tiwari, Head- Operating Officer Convener
2 Shailaja Gyawali, Chief Integrated Risk Officer Member
3 Saroj Kafle, Head- Compliance & Corporate Governance Member
4 Pramesh Shrestha, Head- Strategy and Finance Member
5 Sanjay Pradhan, Manager, Internal Audit Department Member
6 Gokul Sapkota, Manager – Legal Member
7 Deependra Paudel, Manager- General Administration Department Member Secretary

During the review year, the Record Disposal Committee held a total of one meeting. In this meeting, discussions were held
regarding the recommendation for disposal of old and unnecessary documents from the Hattisar branch.

ANNUAL
170 REPORT 2023-24
DETAILS AS PER SECTION 109 OF THE COMPANIES ACT, 2006

RESPONSE OF THE BOARD OF DIRECTORS TO ANY REMARKS directors’ or officials’ involvement in share transactions
MENTIONED IN THE AUDIT REPORT during the last fiscal year.
There are no significant remarks in the audit report.
DISCLOSURE OF ANY PERSONAL INTEREST OF DIRECTORS OR THEIR
RECOMMENDED DIVIDEND DISTRIBUTION CLOSE RELATIVES IN AGREEMENTS RELATED TO THE COMPANY
Upon approval from Nepal Rastra Bank, the 23rd Annual No such information was received by the Bank during the
General Meeting has recommended a cash dividend of previous fiscal year.
4.00% (including tax purposes) of the Bank’s current paid-
up capital of NPR 14,089,980,185. Accordingly, a total of NPR IF THE COMPANY HAS REPURCHASED ITS OWN SHARES, THE REASONS,
563,599,208 has been proposed for distribution among NUMBER, FACE VALUE, AND THE AMOUNT PAID FOR SUCH REPURCHASE
shareholders for the fiscal year 2023-24. The bank has not repurchased its own shares to date.

DETAILS OF FORFEITED SHARES, IF ANY PRESENCE OF AN INTERNAL CONTROL SYSTEM AND ITS DETAILS
The Bank has not forfeited any shares to date. This aspect has been detailed separately in the report.

REVIEW OF THE PROGRESS OF THE COMPANY AND ITS SUBSIDIARIES LIST OF MEMBERS OF THE AUDIT COMMITTEE, THEIR REMUNERATION,
DURING THE PREVIOUS FISCAL YEAR AND THE FINANCIAL POSITION AT ALLOWANCES, AND BENEFITS, DETAILS OF THE COMMITTEE’S
THE END OF THE YEAR PROCEEDINGS, AND ANY RECOMMENDATIONS MADE BY THE
A detailed review of this aspect has been separately COMMITTEE
presented in the report. As per the directives of Nepal Rastra Bank and prevailing
legal provisions, the Board of Directors has constituted an
Audit Committee under the chairmanship of a Non-Executive
MAJOR TRANSACTIONS CONDUCTED BY THE COMPANY AND ITS
SUBSIDIARIES DURING THE FISCAL YEAR AND ANY SIGNIFICANT Director.
CHANGES IN OPERATIONS
During the review period, the Bank continued its regular In accordance with the directives of Nepal Rastra Bank and
banking operations. Similarly, the subsidiary company also the provisions of prevailing laws, the Bank’s Board of Directors
conducted its business activities in line with its operational has constituted an Audit Committee under the coordination
nature. There were no significant changes in business of a non-executive director. The primary objective of this
operations during the review period. committee is to assess the Bank’s internal control system,
evaluate the audit process, and supervise the reporting
and dissemination of financial statements to ensure their
INFORMATION PROVIDED BY THE PRINCIPAL SHAREHOLDERS OF THE
COMPANY DURING THE PREVIOUS FISCAL YEAR accuracy and adequacy. Additionally, the committee
The bank did not receive any such information from its ensures that all departments of the Bank comply with
principal shareholders during the last fiscal year. internal procedures, policies, and regulations. Furthermore,
the committee reviews external audit reports and submits
recommendations to the Board of Directors for necessary
DETAILS OF SHARES HELD BY THE COMPANY’S DIRECTORS AND
OFFICIALS DURING THE PREVIOUS FISCAL YEAR AND ANY INVOLVEMENT improvements.
IN SHARE TRANSACTIONS
The bank did not receive any such information regarding The details are presented in page no 153-154 of this report.

ANNUAL 171
REPORT 2023-24
 DETAILS OF TOTAL MANAGEMENT EXPENSES FOR THE PREVIOUS FISCAL YEAR
The bank’s employee expenses (including bonuses) for the fiscal year 2023-24 amounted to NPR 2,977,901,219, while office
operation expenses were NPR 1,852,832,100. Thus, the total management expenses stood at NPR 4,830,733,319.

OUTSTANDING AMOUNTS OWED TO THE COMPANY

There are no outstanding amounts that need to be paid to the company by any director, managing director, chief executive
officer, principal shareholders of the company, or their close relatives, as well as any firm, company, or organized institution
associated with them.

REMUNERATON, ALLOWANCES, AND BENEFITS PAID TO DIRECTORS, MANAGING DIRECTOR, CHIEF EXECUTIVE OFFICER, AND OFFICIALS
As per the decision made in the 20th Annual General Meeting held on 14 January 2022 and with the approval of Nepal Rastra
Bank, along with the provisions in the regulations, the 389th board meeting held on 21 February 2022 decided to provide a
per-meeting allowance of NPR 18,000 for the Chairperson and NPR 14,000 for the members. Additionally, directors traveling
from outside the Kathmandu Valley to attend board or board-level committee meetings are reimbursed for actual airfare,
including airport tax, and are provided a daily allowance of NPR 8,000 for meals, accommodation, and other incidental
expenses. Furthermore, directors, including the chairperson, receive a fixed monthly allowance of NPR 12,000 for newspaper
and communication expenses.

Details of Payments Made to Directors (FY 2023-24)

AMOUNT PAID IN
S.N. DESCRIPTION
NPR
1 Board of Directors Meeting Allowance 1,466,000

A Total 1,466,000

2 Other Expenses of the Board of Directors

a) Hotel and Daily Travel Allowance 650,900

b) Newspaper and Communication 864,000

c) Board-Level Committee Meeting Allowance 1,166,000

d) Board Committee Training Expenses 7,187,654

e) Other Expenses 548,770

B Total 10,446,532

Total Expenses (A+B) 11,912,532

Details of Salary, Allowances, and Benefits Paid to the Chief Executive Officer and Managers in Fiscal Year 2023-24

Amount in NPR
DESCRIPTION CHIEF EXECUTIVE OFFICER OTHER OFFICERS, OFFICIALS & MANAGERS
Salary 9,639,187 161,298,900
Allowance 4,080,000 62,337,171
Dashain Allowance 1,106,800 18,045,975
Annual Leave Allowance 450,000 12,574,034
Vehicle Facility Allowance 1,756,800 83,157,946
Total 17,032,787 337,414,030
Number 1 105

ANNUAL
172 REPORT 2023-24
 For the Chief Executive Officer (CEO): Payment for OTHER DISCLOSURES REQUIRED IN THE BOARD OF DIRECTORS’ REPORT
AS PER THE ACT AND APPLICABLE LAWS
newspaper and internet charges – up to NPR 25,000
There are no additional matters to be disclosed in the Board
annually, and payment for telephone charges – up to NPR
of Directors’ report as per the Act and prevailing laws.
3,000 per month.

 For the CEO: A driver, vehicle maintenance, and fuel have  Auditor
been provided, along with a vehicle loan facility. For We express our gratitude to S.A.R. Associates, Chartered
managerial-level officers, provisions have been made Accountants for successfully completing the audit of the
as per the Employee Service Regulations and Human Bank for the fiscal year 2023-24. Additionally, in accordance
Resource Policy. with Section 111 of the Companies Act, 2063 and Section 61 (g)
of the Banks and Financial Institutions Act, 2073, a proposal
 Regarding Bonus: As per the Bonus Act, and Provident for the appointment of the auditor and approval of their
Fund Contributions are made as per the Labor Act. remuneration has been presented in this general meeting
based on the recommendation of the Audit Committee.
 Life Insurance, Medical Insurance, and Accident Insurance
– Provided as per the provisions in the Bank’s Employee  Details Regarding Any Close Relatives of the Bank’s
Service Regulations. Directors or Officers Holding Positions at the Office of the
Company Registrar, Securities Board, or Nepal Rastra Bank
 Salaries, Allowances, and Benefits Provided are subject (NRB) at a Minimum Officer Level:
to tax deductions as per the prevailing laws before
disbursement. There are no such cases to report.

UNCLAIMED DIVIDEND AMOUNT BY SHAREHOLDERS ADDITIONAL DETAILS AS PER SECTION 109

As of the review period, a total of NPR 98,760,180 of the cash (4) OF THE COMPANIES ACT, 2063
dividend declared by the Bank in previous fiscal years  Board of Directors’ Comments on the Auditor’s Report:
remains unclaimed by shareholders. Additionally, details of The Board of Directors has discussed the details and
unclaimed dividends from past years can be accessed on recommendations mentioned in the auditor’s report.
the Bank’s website www.siddharthabank.com. The management has been directed to implement the
suggestions provided by the auditor. Additionally, the reports
DETAILS OF ASSET PURCHASE OR SALE AS PER SECTION 141: prepared by the Audit Committee are regularly submitted
In the previous fiscal year, the Bank did not purchase or sell to the Board of Directors for discussions and necessary
any assets under Section 141 of the Companies Act, 2063. decisions.

DETAILS OF TRANSACTIONS BETWEEN RELATED COMPANIES AS PER

SECTION 175:
Relevant details regarding related-party transactions are
mentioned in Note 5.7 under the financial statements.

ANNUAL 173
REPORT 2023-24
  Audit Committee

The following members are part of the Bank’s Audit Committee:

S.N. NAME OF AUDIT COMMITTEE MEMBERS POSITION

1 Dinesh Shanker Palikhe, Director Convener

2 Narendra Kumar Agrawal, Director Member

3 Sanjay Pradhan, Head- Internal Audit Department Member Secretary

Nirakar Bahadur Singh, Head Sudurpaschim Province, was the Member Secretary of this committee. However, after being
appointed as the Head of the Sudurpaschim Province Office on 17 September 2023, Sanjay Pradhan assumed the role of
Member Secretary.

During the review period, a total of 19 meetings of the Audit MEETING ALLOWANCE FOR DIRECTORS
Committee were held, in which discussions were primarily During the review period, directors serving on the Audit
conducted on the following topics, and various decisions Committee were provided with a meeting allowance of NPR
were made: 14,000 per meeting.

 Discussion on audits conducted in various branches and PAYMENTS MADE TO DIRECTORS AND THE CHIEF EXECUTIVE OFFICER
departments under the annual internal audit plan. DURING THE REVIEW PERIOD:
 A total of NPR 11,912,532.34 was paid to directors for
 Discussion on audit reports related to letter of credit meeting allowances, daily travel allowances, other
transactions in various branch offices of the Bank. allowances, and expenses (including training expenses).

 Discussion on audit reports related to investment and risk

 A total of NPR 17,032,787 was paid to the Chief Executive
management.
Officer as salary, allowances, Dashain allowance, annual
leave allowance, and vehicle allowance.
 Review of adherence to principles such as regularity,
economy, propriety, and effectiveness in the Bank’s g
Payment for Newspaper and Internet Charges – Up to
operations and providing necessary suggestions to the
NPR 25,000 per year, and Telephone Charges – Up to NPR
Board of Directors.
3,000 per month.

 Recommendation of three auditors to the Board of g

Provision of Vehicle Facilities – A driver, maintenance,
Directors for external audit for the fiscal year 2023-24.
and fuel have been provided, along with a vehicle loan
facility.
 Discussion on audit findings related to various
departments under the central office. g
Bonus – As per the Bonus Act, and Provident Fund
Contribution – As per the Labor Act.
 Review of the Bank’s quarterly financial statements.
g
Insurance Coverage – Life insurance, medical treatment
 Discussion on financial conditions of branch offices.
insurance, and accident insurance are provided as per
 Discussion on issues identified in branch office loans. the Bank’s Employee Service Regulations.

 Review of the capital fund details, and base rate certified

g
Salary, Allowances, and Benefits – All payments
by the internal audit department. are made after deducting applicable taxes as per
prevailing laws.
 Discussion on the performance evaluation of the Head of
the Internal Audit Department. DIVIDEND DETAILS
The Bank distributed a 4.21% cash dividend (including tax
 Review of the audit report submitted by the external
purposes) for the fiscal year 2022-23. For the fiscal year 2023-
auditor and instructing management to take corrective
24, the 439th Board of Directors meeting, held on 6 December
actions.
2024, has proposed a 4.00% cash dividend (including tax
purposes).
 Review of observations in the report submitted by
the Nepal Rastra Bank’s Supervision Department and
 The Bank has not confiscated any shares in the fiscal year
instructing management to take corrective actions.
2023-24.
 Discussion on current achievements based on the
approved policy and program of the Internal Audit  No director, executive, founding shareholder of the Bank,
Department for the fiscal year 2023-24. or their relatives, nor any firm, company, or organized
institution associated with them, has any outstanding
 Review and approval of the Risk-Based Annual Audit Plan dues payable to the Bank.Annual Compliance Report on
for the fiscal year 2024-25. Corporate Governance

ANNUAL
174 REPORT 2023-24
 ANNUAL 175
REPORT 2023-24
 ANNUAL COMPLIANCE REPORT ON CORPORATE GOVERNANCE
We would like to inform you that some of the details mentioned in the annual compliance report for the year 2023-24 related
to corporate governance are mentioned in the Banks’ annual report 2023-24 on several topics such as Board of Director/
board level committees, corporate governance, management level committees, human resource development activities. The
details other than above mentioned are given below:

Registered Name of the Institution Siddhartha Bank Limited

Address, Email & Website Bagmati Province, Kathmandu District, Kathmandu Metropolitan City Ward No. 1, Naxal

Email & Website info@sbl.com.np, https://www.siddharthabank.com

Phone Number 01-5970070

Report Submission Date Fiscal Year 2023-24

DETAILS REGARDING THE BOARD OF DIRECTORS

Whether a separate record (minutes) of the directors present in the board meeting,
: Maintained
the topics discussed, and the decisions made has been maintained

Maximum interval (in days) between two consecutive board meetings. : 37 Days

Date of the Annual General Meeting held regarding the determination of board : 14 January 2022 (20th Annual
meeting allowances. General Meeting)

DETAILS REGARDING THE ORGANIZATION’S RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

EXISTENCE OF FINANCIAL ADMINISTRATION REGULATIONS: THE FINANCIAL ADMINISTRATION REGULATIONS 2080 ARE IN IMPLEMENTATION

DETAILS REGARDING INFORMATION AND COMMUNICATION DISSEMINATION

DETAILS OF INFORMATION AND COMMUNICATION DISSEMINATED BY THE ORGANIZATION

INFORMATION MEDIUM DATE OF PUBLICATION

Annual General Karobar National Daily (First) 31 October 2023
Meeting Karobar National Daily (Second) 8 November 2023
Annual Report Uploaded on the Bank’s Website (FY 2022-23) 8 November 2023
First Quarter (FY 2023-24) Nepal Samacharpatra National Daily 3 November 2023
Second Quarter (FY 2023-24) Madhyanha National Daily 21 January 2024
Quarterly Report Third Quarter (FY 2023-24) Rajdhani National Daily 19 April 2024
Fourth Quarter (FY 2023-24) Aarthik Abhiyaan National Daily 5 August 2024

First Quarter (FY 2023-24) Nepal Madhyanha National Daily 2 November 2023
Second Quarter (FY 2023-24) Aarthik National Daily 31 January 2024
Right to Information Third Quarter (FY 2023-24) Aarthik National Daily 11 May 2024
Fourth Quarter (FY 2023-24) Annapurna Post National Daily 13 August 2024

Aarthik Abhiyaan National Daily 6 August 2023

Aarthik Abiyaan National Daily 8 August 2023
Aarthik National Daily 17 August 2023
Himalayan Times National Daily 17 September 2023
Randhani National Daily 17 October 2023
Aarthik Abhiyaan National Daily 16 November 2023
Saurya National Daily 16 December 2023
Interest Rate Related
Himalayan Times National Daily 14 January 2024
Rajdhani National Daily 12 February 2024
Aarthik Abhiyaan National Daily 13 March 2024
Aarthik National Daily 12 April 2024
Saurya National Daily 13 May 2024
Aarthil National Daily 14 June 2024
Saurya National Daily 15 July 2024

The information was

uploaded to the
Sensitive Information
The dividend for the fiscal year 2022-23, decided on 11 October 2023, has NEPSE’s website on
that affects the Price
been uploaded to the Nepal Stock Exchange website. 11 October 2023 and
of Securities
submitted to the
office NEPSE.
ANNUAL
176 REPORT 2023-24
OTHERS
 Information regarding the undistributed dividends to be received by shareholders was published in the Karobar National
Daily on 15 August 2023 and 11 July 2024

 Information regarding the closure of the shareholder registration book for the purpose of the general meeting was
published in the Karobar National Daily on 31 October 2023

 Information regarding dormant accounts for the last 10 years was published in the Karobar National Daily on 15 August 2023.

DETAILS ON ORGANIZATION’S ACCOUNT & AUDIT

ACCOUNTING DETAILS

First Quarter (FY 2023-24) 3 November 2023

Second Quarter (FY 2024-25) 21 January 2024

Quarterly Financial Report Publication Date
Third Quarter (FY 2024-25) 20 April 2023

Fourth Quarter (FY 2024-25) 7 November 2023

Date of Approval of Financial Statement by AGM (FY 2022-23)

OTHER DETAILS
DESCRIPTION STATUS

Any financial interest of directors or their immediate family

members in terms of loans, guarantees, or any other financial No loans, guarantees, or any other financial involvement.
involvement with the Bank or financial institution.

Disclosure of involvement of directors, shareholders,

employees, advisors, and related parties in consulting,
No such payments have been made.
advisory, brokerage, or any other services with the financial
institution and details of compensation paid.

Compliance with regulatory provisions regarding sale and

Compliant with regulatory provisions.
purchase of assets.

Compliance with investment in institutions restricted or

No investment has been made.
prohibited by regulations.

Details of any disputes or cases filed against the institution or

No disputes or cases have been filed.
directors in court.

Any matter from the Bank or financial institution that might

No such matter exists.
have a long-term impact on depositors’ interests.

Name of the Compliance Officer : SAROJ KAFLE

Position : COMPLIANCE & GOVERNANCE OFFICER
Date : 6 DECEMBER 2024
Date of Report Approved by the Board of Directors : 6 DECEMBER 2024

ANY PENALTIES BY THE REGULATOR OR NEGATIVE OBSERVATIONS BY THE THIRD-PARTY

ASSURER.
Siddhartha Bank has not faced any penalties for non-compliance.

ANNUAL 177
REPORT 2023-24
 ANNUAL
178 REPORT 2023-24
INVESTOR
INFORMATION

ANNUAL 179
REPORT 2023-24
 STRUCTURE OF SHARE CAPITAL
The total paid-up capital of the Bank comprises 51% ownership by promoter shareholders and 49% ownership by public
shareholders.

As of the review period, the number of promoter shareholders stood at 279, while the number of public shareholders was
65,753. However, by the end of 16 October 2024 of the current fiscal year, the total number of shareholders had declined to
63,597, consisting of 279 promoter shareholders and 63,318 public shareholders.

Share Ownership Structure (As of 15 July 2024)

NUMBER OF SHARES NUMBER OF SHAREHOLDERS SHARES HELD (UNITS) % OF PAID UP CAPITAL

1 - 100 44,231 6,601,629 4.58%

101 - 1,000 10,389 5,234,384 3.63%

1,001 - 9,000 3,266 8,094,048 5.61%

9,001 - 2,000 1,848 2,178,069 1.51%

2,001 - 4,000 1,036 2,856,344 1.98%

4,001 - 9,000 680 4,204,648 2.91%

9,001 - 40,000 640 93,839,669 64.97%

Above 40,000 232 44,823,198 31.00%

Total 66,032 144,428,019 100.00%

DETAILS OF INDIVIDUAL AND INSTITUTIONAL SHAREHOLDERS (AS OF AS OF 16 JULY 2024)

NUMBER OF
DESCRIPTION TOTAL SHARES OWNED (UNITS) SHARE OWNERSHIP (%)
SHAREHOLDERS

Promoter Shareholders - Institutional 8 541,753,945

279 51.00
Promoter Shareholders -Individual 271 6,888,936,302

Public Shareholders - Institutional 316 64,889,322

65,753 49.00
Public Shareholders - Individual 65,408 6,048,417,678

Total 66,032 66,032 14,088,909,169 100.00

GROUP BANK
SHARE CAPITAL
THIS YEAR LAST YEAR THIS YEAR LAST YEAR

Ordinary Shares 140,820,910 1,408,020,910 1,408,020,910 140,820,910

Convertible Preference Shares - - - -

Non- Convertible Preference Shares - - - -

Perpetual Debt - - - -

Total 140,820,910 1,408,020,910 1,408,020,910 140,820,910

BANK
ORDINARY SHARES
THIS YEAR LAST YEAR

Authorized Capital 16,00,00,000 ordinary shares @ NPR 100 each 16,00,00,000 ordinary shares @ NPR 100 each

Issued Capital 14,08,20,910 ordinary shares @ NPR 100 each 14,08,20,910 ordinary shares @ NPR 100 each

Paid-up Capital 14,08,20,910 ordinary shares @ NPR 100 each 14,08,20,910 ordinary shares @ NPR 100 each

Calls in Advance - -

Total 1,408,020,910 1,408,020,910

ANNUAL
180 REPORT 2023-24
 BANK
ORDINARY SHARE OWNERSHIP
THIS YEAR LAST YEAR

Domestic Ownership - -

Government of Nepal - -

Class “A” Licensed Institutions - -

Other Licensed Institutions - -

Other Institutions - -

General Public 49% 690,400,323

Others 51% 718,520,587

Foreign Ownership - -

Total 100% 140,820,910

SHAREHOLDERS HOLDING 0.5% OR MORE SHARES

BANK
S.N. NAME OF SHAREHOLDERS HOLDING 0.5% OR MORE THIS YEAR LAST YEAR
PERCENTAGE AMOUNT IN NPR PERCENTAGE AMOUNT IN NPR

1 Prudential Investment Company Pvt. Ltd. 3.23% 455,323,800 3.23% 455,323,800

2 Narendra Kumar Agrawal 2.95% 415,732,600 2.95% 515,732,600

3 Ratan Lal Kedia 2.48% 349,770,300 2.48% 349,770,300

4 Savita Kedia 1.92% 271,209,200 1.92% 271,209,200

5 Chiranji Lal Agrawal 1.81% 255,130,800 1.81% 255,130,800

6 Pawan Kumar Agrawal 1.76% 248,409,400 1.76% 248,409,400

7 Subodh Todi 1.55% 218,069,800 1.55% 218,069,800

8 Birendra Kumar Shah 1.54% 216,928,100 0.99% 139,155,500

9 Ashok Kumar Baheti 1.48% 208,090,100 1.49% 209,468,600

10 Narpat Singh Jain 1.45% 205,006,400 1.45% 205,006,400

11 Deena Nath Kedia 1.41% 198,159,700 1.41% 198,159,700

12 Aditya Kedia 1.39% 196,024,200 1.39% 196,024,200

13 Mahabir Investment Pvt. Ltd. 1.37% 192,799,700 1.37% 192,799,700

14 Tushar Todi 1.28% 180,171,500 1.28% 180,171,500

15 Suresh Kumar Rungata 1.21% 180,171,500 1.21% 180,171,500

16 Poonam Chand Agrawal 0.97% 137,344,200 0.97% 137,344,200

17 Binod Kumar Agrawal 0.94% 131,753,800 0.94% 131,753,800

18 Bharat Kumar Todi 0.87% 123,016,000 0.87 123,016,000

19 Raj Kumar Tibrewala 0.81% 113,664,400 0.81% 113,664,400

20 Rajesh Kumar Kedia 0.98% 110,065,500 0.88% 113,664,400

21 Madan Lal Kedia 0.76% 107,387,300 1.08% 152,387,300

22 Rajendra Kumar Agrawal 0.76% 107,013,100 0.76% 107,013,100

23 Shyam Sundar Agrawal 0.75% 105,316,700 0.75% 105,316,700

24 Suresh Kumar Kedia 0.72% 101,230,000 0.72% 101,230,000

25 Keshari Chand Kucheria 0.67% 95,012,500 0.67% 95,012,500

26 Bimal Kumar Kedia 0.65% 91,635,400 0.66% 92,365,000

27 Sashi Kala Agrawal 0.63% 89,298,800 0.63% 89,298,800

28 Manish Jain 0.63% 88,997,700 0.63% 88,997,700

29 Jagadish Kumar Agrawal 0.61% 86,451,100 0.61% 86,451,100

ANNUAL 181
REPORT 2023-24
 BANK
S.N. NAME OF SHAREHOLDERS HOLDING 0.5% OR MORE THIS YEAR LAST YEAR
PERCENTAGE AMOUNT PERCENTAGE AMOUNT

30 Shambhu Kumar Kandoi 0.59% 83,288,100 0.59% 83,288,100

31 Kavindra Bahadur Shrestha 0.59% 82,936,100 0.59% 82,936,100

32 Binaya Kumar Shah Madwari 0.55% 78,153,900 0.55% 78,153,900

33 Saroj Sharma 0.54% 76,384,900 0.54% 76,384,900

34 Indira Rajbhandari 0.50% 70,384,800 0.50% 70,384,800

TRAINING DETAILS
PRACTICING GOOD GOVERNANCE (CG)
Understanding Corporate Governance (CG), OECD Guideline of CG, Benefits of CG, Challenges to CG, NRB Directive on
Corporate Governance, CG Issues in Nepalese Perspective, Responsibilities of Directors as per Laws and Regulations.

CONTEMPORARY ISSUES IN AML/CFT

Board/Management awareness regarding AML, Overview of Anti Money Laundering and Terrorist Financing, Impact of Money
Laundering and Terrorist Financing, AML/CFT Framework, FATF Recommendation/Standards, Assets (Money) Laundering
Prevention Act, 2008, Assets (Money) Laundering Prevention Rule, 2016, Know Your Customer, Threshold Transaction Report
and Suspicious Transaction Report, Policy Formulation and Review of Current Policy, Ensuring Compliance Implementation
in the Organization. Infrastructure for AML/CFT Compliance, Relationship with Compliance Authority, Penalty and Sanctions,
Challenges and Way Ahead.

 Participated by all directors, Promoters having shareholding 1% and above, Executives, Senior Management and Department
Heads and was held on 1 February , 2024

ADVANCED LEADERSHIP PROGRAM (ALP) ORGANIZED BY RICE UNIVERSITY, USA

Executive Leadership, Innovative Strategy, Digital Disruption and Global Economy, Leading Innovation & Fintech, Banking &
Investment, Building an Entrepreneurship Ecosystem
 Participated by all directors

 Held during 17 June 2024 to 19 October 2024

ANNUAL
182 REPORT 2023-24
DETAILS OF SHARES HELD BY DIRECTORS, THEIR IMMEDIATE FAMILY MEMBERS,
AND SENIOR MANAGEMENT OFFICIALS DURING THE REVIEW PERIOD
As of the end of Ashar, Fiscal Year 2080/81, the details of share ownership in the Bank and its subsidiary company, Siddhartha
Capital Limited, held by the Bank’s directors, their immediate family members, and senior management officials (Assistant
General Manager or above), as well as their immediate family members, are as follows:

PROMOTER, EXECUTIVE DIRECTORS & THEIR FAMILY NAME OF SHAREHOLDING SHARE QUANTITY
SHARE TYPE
MEMBERS ENTITY (UNITS)

Prudential Investment Company Pvt. Ltd. Siddhartha Bank Limited 4,553,238 Promoter and Public
Manoj Kumar Kedia- Director Siddhartha Bank Ltd. Siddhartha Capital Limited 30,120 Promoter
Siddhartha Bank Limited 2,712,092 Promoter and Public
Savita Kedia (Wife of Manoj Kumar Kedia)
Siddhartha Capital Limited 6,390 Promoter
Siddhartha Bank Limited 589 Public
Mohit Kedia (Brother of Monoj Kumar Kedia)
Siddhartha Capital Limited 12,510 Promoter
Siddhartha Bank Limited 1,682 Public
Tarachand Kedia (Father of Manoj Kumar Kedia)
Siddhartha Capital Limited 6,090 Promoter
Pushpa Devi Kedia (Mother of Manoj Kumar Kedia) Siddhartha Capital Limited 6,390 Promoter
Siddhartha Bank Limited 4,157,326 Promoter and Public
Narendra Kumar Agrawal, Director
Siddhartha Capital Limited 50,000 Public
Siddhartha Bank Limited 472,333 Promoter and Public
Rahul Agrawal, Director
Siddhartha Capital Limited 40,000 Promoter

Binod Kumar Agrawal (Father of Rahul Agrawal) 1,317,538 Promoter and Public
Rishi Agrawal (Brother of Rahul Agrawal) 56 Public
Ginni Investment Pvt. Ltd. 2,859 Public
Dinesh Shanker Palikhe, Director Siddhartha Bank 385,196 Promoter and Public
Sarsij Palikhe (Wife of Dinesh Shanker Palikhe) Siddhartha Bank Limited 542,564 Promoter and Public
Ayush Palikhe (Son of Dinesh Shanker Palikhe) 1,067 Public
Abhash Palikhe (Son of Dinesh Shanker Palikhe) 1,067 Public
Leverage Holdings Pvt. Ltd. 110,536 Public
Ankit Kedia, Director, Siddhartha Bank 1,171 Public
Siddhartha Bank Limited 3,497,703 Promoter and Public
Ratna Lal Kedia (Father of Ankit Kedia)
Siddhartha Capital Limited 27,690 Promoter

Mina Kumari Sainju, Independent Director 119

Tunga Nath Karmacharya (Husband of Mina

6,510
Kumari Sainju)
Shreya Karmacharya (Daughter of Mina Kumari
1,045
Sainju)
Diya Karmacharya (Daughter of Mina Kumari
1,147
Sainju)

Sundar Prasad Kadel, Chief Executive Officer Siddhartha Bank Limited 29,438 Public
Rameshwar Prasad Bashyal, Deputy Chief Executive
29,456
Officer
Sher Banadur Budhathoki, Assistant Chief Executive
2,452
Officer

Shailaja Gyawali, Chief Integrated Risk Officer 29,451

Hemanta Gyawali (Husband of Shailaja Gyawali) 4,778

Pradeep Pant, Chief MSME Banking Officer 983

ANNUAL 183
REPORT 2023-24
 REPRESENTATION IN THE BOARD OF DIRECTORS
The Board of Directors (BOD) of Siddhartha Bank is a well-balanced team of experienced professionals and industry leaders
who bring a wealth of expertise from banking, finance, investments, business, and corporate governance. The Board ensures
effective decision-making, strategic oversight, and responsible corporate governance, aligning with the Bank’s mission to
provide sustainable financial services.

DIVERSITY AND INCLUSIVITY IN THE BOARD

The Bank believes that a well-represented Board fosters innovation, transparency, and responsible leadership. Our Board
consists of individuals from varied backgrounds, including banking, business, investments, governance, and finance, ensuring
a broad spectrum of perspectives.

KEY HIGHLIGHTS OF BOARD REPRESENTATION

 Gender Representation: Inclusion of women in leadership positions, promoting diversity in decision-making.
 Independent Directorship: Ensuring transparency and unbiased governance.

 Shareholder Representation: Active participation of key shareholders in strategic decision-making.

 Sectoral Diversity: Members from banking, finance, trade, and investments, ensuring a well-rounded approach to
governance.

 Multi-Generational Leadership: A mix of experienced and young professionals driving innovative and strategic growth.

 Global Knowledge: Members with international academic qualifications and exposure.

COMPOSITION OF THE BOARD OF DIRECTORS

CATEGORY NUMBER OF MEMBERS REPRESENTATION FOCUS
Chairman 1 Banking Investments & Business
Directors 4 Business, Finance & Strategy
Independent Director 1 Corporate Governance & Ethics

The Board of Siddhartha Bank is dedicated to upholding the highest standards of corporate governance, fostering financial
resilience, and driving inclusive growth. By embracing diversity, ethical leadership, and forward-thinking strategies, the Bank
continues to build a strong, sustainable, and customer-centric financial institution.

ANNUAL
184 REPORT 2023-24
NOTICE OF THE 23RD ANNUAL GENERAL MEETING OF
SIDDHARTHA BANK LIMITED

To the Esteemed Shareholders,

As per the decision made in the 440th Board of Directors meeting held on 20 December 2024, the 23rd Annual General Meeting (AGM) of the
Bank has been scheduled to discuss and decide on the following matters. In accordance with Section 67 of the Companies Act, 2063, this
notice is published for the information and attendance of all esteemed shareholders.

DETAILS OF THE AGM

 Date: Sunday, 12 January 2025

 Venue: Army Officers Club, Bhadrakali, Kathmandu

 Time: 10:30 AM (Attendance book will be open from 9:30 AM)

AGENDA FOR DISCUSSION

ORDINARY RESOLUTION
 Discussion and approval of the 23rd Annual Report (Directors Report), of the Board of Directors for the Fiscal Year 2023-24.

 Approval of the financial statements as of 16 July 2024 including the auditor’s report, the profit and loss statement for the period from 17
July 2023 to 16 July 2024, the cash flow statement for the same period, the statement of changes in equity, and the related schedules.

 Discussion and approval of the consolidated financial statement of the Bank, including the financial statements of its subsidiary
company, “Siddhartha Capital Limited,” for the fiscal year 2023-24.

 As per Section 111 of the Companies Act, 2063, and Section 63 of the Banks and Financial Institutions Act, 2073, an external auditor for the
fiscal year 2023-24 will be appointed based on the recommendation of the Bank’s Audit Committee, and determine their remuneration.
The current auditor, S.A.R. Associates, Chartered Accountants, is eligible for reappointment as per Section 111 (3) of the Companies Act,
2063.

 Approval for the distribution of a 4% cash dividend (including tax) from the Bank’s paid-up capital of NPR 14,089,980,185 (Fourteen billion,
eight hundred ninety-nine million, eighty thousand, one hundred eighty-five rupees only), amounting to NPR 563,599,208 (Five hundred
sixty-three million, five hundred ninety-nine thousand, two hundred eight rupees only).

 In accordance with Rule 8 of the Bank’s Article of Association, an election will be held to appoint a total of five (5) directors for the
upcoming four-year term, comprising three (3) representatives from the promoter shareholders’ group and two (2) representatives
from the public shareholders’ group.

SPECIAL RESOLUTION
 Approval of the proposal to issue “SBL 8.25% Perpetual Non-Cumulative Preference Shares” worth NPR 3.50 billion at a rate of NPR 100 per
share, subject to approval from the relevant regulatory authorities, as proposed by the Board of Directors.

 Approval of the proposal to increase the Bank’s authorized capital from the current NPR 16 billion to NPR 20 billion, as the issuance of
perpetual non-cumulative preference shares will necessitate an increase in capital.

 Approval of the proposal to increase the Bank’s current issued capital from NPR 14,089,980,185 (fourteen billion, eight hundred ninety-
nine million, eighty thousand, one hundred eighty-five rupees) to NPR 17,589,980,185 (seventeen billion, five hundred eighty-nine million,
eighty thousand, one hundred eighty-five rupees) following the issuance of perpetual non-cumulative preference shares.

 Approval of the proposal to increase the Bank’s current paid-up capital from NPR 14,089,980,185 to NPR 17,589,980,185 after the issuance
of perpetual non-cumulative preference shares.

 Make necessary amendments and modifications to the existing provisions in the Memorandum of Association and Articles of
Association to facilitate the issuance of perpetual non-cumulative preference shares.

 Approval of changes and adjustments to the directors’ allowances and benefits, along with necessary amendments to the Bank’s
regulations accordingly.

 Delegation of authority to the Board of Directors or an authorized official designated by the Board of Directors to make any necessary
modifications, amendments, or linguistic improvements to the Bank’s Memorandum of Association and Articles of Association, and to
carry out tasks related to the issuance, registration, and listing of perpetual non-cumulative preference shares, in compliance with
directives and suggestions from regulatory bodies such as Nepal Rastra Bank, the Office of the Company Registrar, and the Securities
Board of Nepal.

 Approval of the expenditure exceeding the limit set by Section 105 (1) of the Companies Act while providing financial assistance as part
of the Bank’s corporate social responsibility in the FY 2023-24.

MISCELLANEOUS
As decided by Board of Directors
Company Secretary
ANNUAL 185
REPORT 2023-24
 BRIEF INFORMATION REGARDING THE ANNUAL GENERAL MEETING

 For the purpose of the General Meeting, the Bank’s share  Shareholders wishing to ask questions under the
transfer registration will be closed for one (1) day on 29 miscellaneous agenda must inform the company
December 2024. Shareholders whose shares have been secretary’s office at the Bank’s head office in Naxal,
allotted or traded on the Nepal Stock Exchange before Kathmandu, at least seven (7) days before the meeting.
this date and are recorded in the Bank’s shareholder Topics not notified in advance will not be discussed in the
register will be eligible to participate, discuss, and vote in meeting.
the meeting.
 Shareholders who have not yet received their share
 Shareholders may participate, discuss, and vote in the certificate or share statement must collect them from
meeting either personally or through a representative. the Bank’s share registrar, Siddhartha Capital Limited,
In the case of minor shareholders, their guardians or Narayanchaur, Naxal, Kathmandu, or from the depository
appointed representatives may participate, discuss, and participant where their beneficiary account is maintained.
vote. Only individuals whose names are registered as Share certificates will not be distributed at the meeting
guardians in the shareholder register will be recognized venue on the day of the meeting.
as such.
 Only shareholders presenting their identity card along
 If shares are jointly owned by more than one person, the with the entry pass issued by the Bank, share certificate, or
partner nominated by the co-owners or their appointed proof of share dematerialization (DMAT account details/
representative shall be eligible to participate and vote. If BOID statement) will be allowed entry into the meeting
no nomination has been made, only the vote or proxy of hall.
the person whose name appears first in the shareholder
register will be considered valid.  Shareholders are kindly requested to be present before
the meeting starts. For the convenience of shareholders,
 Shareholders who wish to appoint a representative the attendance register will be open from 8:00 AM on the
for participation, discussion, and voting must appoint meeting day.
another shareholder of the Bank as their representative.

NOTE:
 The appointed representative must submit the proxy
 The annual financial statements, Board of Directors’
form to the Bank’s share registrar, Siddhartha Capital
report, auditor’s report, and discussion topics related
Limited, Narayanchaur, Naxal, Kathmandu, at least 48
to the General Meeting are also available on the Bank’s
hours before the commencement of the meeting.
website www.siddharthabank.com for reference.

 If a shareholder who has appointed a representative

 Shareholders who have not updated their bank account
wishes to cancel the appointment and assign a new
details in their beneficiary account and those who have
representative, they must notify the Bank’s share registrar
not yet dematerialized their share certificates (DMAT) are
at least 48 hours before the commencement of the
requested to complete the dematerialization process
meeting.
and update their bank account details in their beneficiary
account accordingly.
 If a shareholder appoints multiple representatives, all
such appointments shall be considered invalid except
 For further information, shareholders are requested to
where cancellation has been made as per clause 6. If a
contact the Company Secretary’s Office at the Bank’s
shareholder, for any reason, wishes to cancel the proxy
registered office in Naxal, Kathmandu (Telephone No. 01-
and participate in the meeting personally, they must
5970720).
submit a written notice to the share registrar at least 48
hours before the commencement of the meeting.

ANNUAL
186 REPORT 2023-24
RIGHT TO INFORMATION AND GRIEVANCE MANAGEMENT

As a public limited company, the Bank places great To streamline grievance redressal and provide necessary
importance on stakeholders’ right to information. It information, the Bank has established a Central Information
considers accountability, transparency, and responsibility and Grievance Handling Desk (CIGHD) at its head office. The
as key components of good governance and the right to CIGHD collects all inquiries, grievances, and suggestions,
information. The bank ensures that stakeholders are well- provides necessary information, and coordinates with
informed by publicly disseminating relevant information. It various departments for resolution. It gathers information
fully complies with the provisions of the Right to Information through suggestion boxes at branches, the helpdesk on the
Act, 2064 (2007) and has appointed a Chief Information Bank’s website, telephone, email, Facebook, Viber, Instagram,
Officer in accordance with Section 6 of the Act. hotline, and written or verbal requests from customers. The
The bank operates under the core principle of “Relationship Bank strives to resolve issues as quickly as possible.
for a Lifetime” and accordingly addresses customer and Additionally, the Bank has developed an online grievance
stakeholder needs and grievances effectively. It prioritizes portal on its website, allowing customers to submit
customer grievances and has developed mechanisms to complaints directly. A Grievance Management Officer
ensure they are directed to the appropriate authorities in a has been appointed to ensure the efficient handling and
timely manner. resolution of customer concerns with the highest priority.
Furthermore, in compliance with Nepal Rastra Bank’s
Directive No. 20, Clause No. 9 (Gha), the details of grievance
handling have been included on page 107 of this annual
report.

DETAILS AS PER UNIFIED DIRECTIVE NO. 20 (GHA) ISSUED BY NEPAL RASTRA BANK
The bank has established a well-structured grievance handling mechanism to address customer concerns effectively. It has
provided information on how to register complaints and has set up various channels for grievance submission. Customers can
submit complaints through multiple platforms, including branches, the Bank’s website helpdesk, telephone, email, Facebook,
Viber, Instagram, and in written or verbal formats.
To manage and address grievances efficiently, the Bank has developed an internal framework that categorizes and prioritizes
complaints. Accordingly, the designated Grievance Handling Officer oversees complaints related to customer service and
transactions. The bank also maintains records of registered complaints, their resolution status, and pending cases for further
action.

As per Nepal Rastra Bank’s Directive No. 20, Clause No. 9 (Gha), the following table summarizes complaints registered, resolved,
and pending during the fiscal year 2023-24:

TOTAL COMPLAINTS COMPLAINTS COMPLAINTS

CATEGORY
REGISTERED RESOLVED PENDING

Grievance Related to Technical Issues 4 4 -

Grievance Related to Financial Misconduct 3 3 -

Grievance Related to Financial Transaction 4 4 -

Grievance Related to Interest Rate 2 2 -

Grievance Related to Service Quality 55 55 -

Grievance Related to Employee Conduct 20 20 -

Grievance Related to Physical Distant 2 2 -

Others 34 34 -

Total 124 124 -

ANNUAL 187
REPORT 2023-24
 GRIEVANCE REGISTRATION AND INFORMATION CHANNELS
CUSTOMERS CAN REGISTER COMPLAINTS OR SEEK INFORMATION THROUGH THE FOLLOWING MEANS:

TOLL-FREE NUMBER CALL COUNTER FAX NUMBER

1660-01-252521660-01-25252 5970024 / 9801232121 01-4441326

P.O. BOX EMAIL WEBSITE

13806 customercare@sbl.com.np www.siddharthabank.com

The Bank remains committed to resolving customer grievances

efficiently and ensuring high service standards.

WWW.FACEBOOK.COM/ INSTAGRAM.COM/ LINKEDIN.COM/COMPANY/

SIDDHARTHABANKLTD SIDDHARTHABANK SIDDHARTHABANKLIMITED

@SIDDHARTHABANK X.COM/ CHATS.VIBER.COM/ WWW.YOUTUBE.COM/@

SIDDHARTHABANK SIDDHARTHABANKLIMITED SIDDHARTHABANKLTD

RIGHT TO INFORMATION & GRIEVANCE HANDLING

Siddhartha Bank is driven by the motto “Relationship Forever” well-developed mechanism to collect the grievances of
and believes that the Bank can build lasting relationship with customers so that it reaches the concerned authority to
the customers’ if their needs and grievances are addressed resolve the grievances in time.
properly.
In order to streamline the mechanism of handling
The Bank has given high importance to honoring the customer information requests & disclosures along with the
stakeholders’ Right to Information. The Bank understands requirement of a public grievance hearing system across
accountability, transparency and responsibility are key the Bank, Central Information and Grievance Handling Desk
factors of Right to Information (RTI) and critical for good (CIGHD) has been established at Head Office. CIGHD collects
governance. The Bank discloses information adequately to all information, complaints/suggestions which fall beyond the
the stakeholders, which they shall be well informed of. The authority/areas of branches and coordinates with various
Bank complies with the provisions of Right to Information Act, departments to provide information and/or to resolve
2007 and has appointed Chief Information Officer in line with customer grievances. CIGHD collects information from all
the provision of this Act. sources including website, telephone, emails and social sites
such as Facebook, Viber, Instagram, etc. and resolves the
SBL is driven by the motto “Relationship Forever” and issues at the earliest possible within defined Turnaround Time
believes that the Bank can build lasting relationship with (TAT). Customers can directly send grievances to the Bank
the customers’ if their needs and grievances are addressed through the “Grievances” section on the website. Likewise,
properly. The Bank handles grievances received from customers can also contact through phone at the Contact
customers and stakeholders with high priority and ensures Centre of the Bank to lodge their grievances or provide
that the Bank improves from the same. The Bank has suggestions/ feedback.

ANNUAL
188 REPORT 2023-24
 RAMESHWAR PRASAD BASHYAL
CHIEF INFORMATION OFFICER

Mr. Rameshwar Prasad Bashyal, the Deputy Chief Executive Officer of the
Bank is the Chief Information Officer of the Bank. He joined Siddhartha Bank
in the year 2005 and is one of the well-versed banker of the country. Before
joining Siddhartha Bank, he was working at Nabil Bank from the year 1989
holding various functional titles.

CONTACT DETAILS
PHONE: 01-5970720 EXT: 1433
EMAIL: rbashyal@sbl.com.np

SURESH RAJ MAHARJAN

CHIEF GRIEVANCE HANDLING OFFICER

Mr. Suresh Raj Maharjan is the Chief Grievance Handling Officer of

Siddhartha Bank. He is also the Chief Marketing Officer of the Bank and has
been associated with the Bank since 2014. Before joining Siddhartha Bank,
he was associated with Global IME Bank Limited, where he worked in various
high-level positions. Additionally, he has been a director of Nepal Electronic
Payment Systems Ltd.

CONTACT DETAILS
PHONE: 01-5970720 EXT: 1421
EMAIL: suresh.maharjan@sbl.com.np

INFORMATION HANDLING AND GRIEVANCE HANDLING AT THE BRANCH LEVEL HAS BEEN ARRANGED AS FOLLOWS
Branch Manager as Branch Information Officer: Branch Manager acts as Information Officer of the branch and ensures
information as requested by the stakeholders except published by the Bank via annual reports, online media are provided
after obtaining approval from Chief Information Officer. They coordinate with the related department for providing the
information requested after obtaining the necessary approval.

Operations Officer as Branch Grievance Handling Officer: Operations Officer (OO/AOO) of the Branch are assigned as
grievance handling officer of the Branch. The desk of OO/ AOO is named as “Grievance Hearing Desk” at the Branch. Any
grievance/feedback received at the Branch is duly recorded and resolution provided in coordination with the Branch Manager
and related department. Suggestion Box is kept in the customer service area and checked at least on a weekly basis.

The Bank has appointed Chief Grievance Handing Officer and Chief Information Officer in order to efficiently handle and
resolve the issues.

ANNUAL 189
REPORT 2023-24
 SHAREHOLDER’S INFORMATION DASHBOARD
This dashboard highlights all the relevant figures and ratios that would be relevant from a shareholder’s point of view.

EARNINGS PER SHARE (EPS) RETURN ON ASSETS (ROA)

NPR %
1.43%
22.79 1.33%
22.48 1.18% 1.15%
21.86 1.06%

20.6

19.55

2019-20 2020-21 2021-22 2022-23 2023-24 2019-20 2020-21 2021-22 2022-23 2023-24

DIVIDEND PAYOUT RATIO

RETURN ON EQUITY (ROE) %
%

15.68%
76.70%
13.81% 13.82% 13.5%
65.80% 63.90%
11.54%

18.70% 18.30%

2019-20 2020-21 2021-22 2022-23 2023-24

2019-20 2020-21 2021-22 2022-23 2023-24

PRICE EARNINGS RATIO (PE RATIO) TOTAL NETWORTH

NPR in Billion

28.07
25.31
19.35
21.59
20.4
15.14
13.07 12.95 16.01
11.26

2019-20 2020-21 2021-22 2022-23 2023-24

2019-20 2020-21 2021-22 2022-23 2023-24

ANNUAL
190 REPORT 2023-24
 DISTRIBUTABLE PROFIT DISTRIBUTABLE PROFIT PER SHARE
NPR in Million NPR

16.50
1,808.63

11.93
1,359.87
10.86
1,167.79

663.61 4.71
580.36 4.12

2019-20 2020-21 2021-22 2022-23 2023-24 2019-20 2020-21 2021-22 2022-23 2023-24

EARNINGS YIELD
%

8.88%

7.72%

6.60% 6.80%

4.52%

2019-20 2020-21 2021-22 2022-23 2023-24

SHARE PRICE SENSITIVITY ANALYSIS

SBL SHARE PRICE VS NEPSE INDEX

NEPSE INDEX 2,883.38

SBL SHARE PRICE

2,240.41
2,009.46 2,097.09

1,718.15
1,582.67
1,362.35
1,212.36 1,259.02
961.23

869
670
485 504
300 318 296 303 253 283

2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24

ANNUAL 191
REPORT 2023-24
 NEPSE INDEX VS BANKING SUB INDEX

NEPSE INDEX

BANKING
2,883.38

2,240.41
2,009.46 2,097.09

1,718.15
1,582.67
1,362.35 1,964.26
1,212.36 1,259.02
961.23 1,573.71
1,418.81
1,363.39
1,234.80 1,221.24
1,133.04 1,153.00
1,023.56
831.35

2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24

REPORTING OF CORPORATE BENEFITS TO SHAREHOLDERS

Siddhartha Bank Limited (SBL) has demonstrated consistent growth and
value creation for its shareholders through various financial metrics:

VALUE APPRECIATION EARNINGS PERFORMANCE

MARKET CAPITALIZATION NET PROFIT:

PAID UP CAPITAL MARKET CAPITALIZATION FISCAL YEAR NET PROFIT (NPR IN MILLION)
FISCAL YEAR
(NPR IN MILLION) (NPR IN MILLION) 2019-20 2,143.61
2019-20 9,787.77 28,971.79 2020-21 2,854.83
2020-21 10,962.30 55,249.99 2021-22 2,902.46
2021-22 12,524.43 37,949.01 2022-23 3,166.77
2022-23 14,089.98 35,647.64 2023-24 3,080.03
2023-24 14,089.98 39,874.64
EPS:
DIVIDEND DISTRIBUTION FISCAL YEAR EPS (NPR)

CASH STOCK TOTAL 2019-20 15.21

FISCAL YEAR
DIVIDEND DIVIDEND DIVIDEND 2020-21 20.26
2019-20 3.00% 12.00% 15.00% 2021-22 20.60
2020-21 0.75% 14.25% 15.00% 2022-23 22.48
2021-22 0.66% 12.50% 13.16% 2023-24 21.86
2022-23 4.21% 0.00% 4.21%
ROE:
2023-24 4.00% 0.00% 4.00%
FISCAL YEAR RETURN ON EQUITY
NETWORTH PER SHARE 2019-20 13.81%
FISCAL YEAR NET WORTH PER SHARE (NPR) 2020-21 15.68%
2019-20 163.58 2021-22 13.82%
2020-21 186.11 2022-23 13.50%
2021-22 172.45 2023-24 11.54%
2022-23 179.61
These indicators highlight Siddhartha Bank’s commitment
2023-24 199.21
to delivering value to its shareholders through sustained
growth, prudent financial management, and consistent
dividend payouts.

ANNUAL
192 REPORT 2023-24
SIDDHARTHA INVESTOR’S SAVING ACCOUNT coming years, expanding share capital, and efficiently
managing capital. They also emphasized improving the
Siddhartha Investor’s Saving Account is a specialized banking quality of the Bank’s asset, addressing the rising non-
product designed to cater specifically to the financial needs performing loans, prioritizing write-backs, and swiftly
of Siddhartha Bank’s shareholders. This product is specifically disposing of non-banking assets. Additionally, they advised
targeted at shareholders who do not currently hold a increasing foreign exchange earnings, focusing on banking
savings or Demat account with Siddhartha Bank or any income rather than non-banking income, expanding letter
other bank. By offering this account, Siddhartha Bank aims of credit transactions, diversifying the portfolio, and being
to strengthen its relationship with its shareholders, providing vigilant about cyber security, credit risk management,
them with a dedicated savings solution that integrates and foreign exchange risk. Furthermore, shareholders
their investment and banking needs. This initiative reflects suggested maintaining a good relationship with customers
the Bank’s strategic movement to enhance shareholder and shareholders, including key financial indicators such
loyalty and attract new customers, thereby supporting the as per-employee expenses, per-employee income, and
Bank’s long-term growth and reinforcing its commitment to book net worth per share in the annual report. They also
delivering tailored financial services. recommended that only shareholders with at least 100
shares should be eligible to speak at the AGM and that
THE ACCOUNT OFFERS A RANGE OF EXCLUSIVE BENEFITS SUCH AS speakers should provide well-analyzed inquiries and
 Direct dividend crediting suggestions based on the annual report. Additionally, they
 Free Meroshare and DEMAT charges for one year emphasized the need to manage employee expenses
 Free BankSmart XP for one year efficiently.
 50% waiver on Locker Security Margin
 Free subscription of Siddhartha Platinum Debit Card for The Bank has always taken the written and verbal
one year suggestions from shareholders positively for enhancing
 Free subscription of Siddhartha UNO Credit Card for one its managerial and business capabilities. The issues raised
year in the AGM are discussed by the Board of Directors, and
 25% Discount on Issuance Fee of Travel Card necessary instructions are given to the management for
 Free AMC charge on Portfolio Management Service for implementation. The implementation status is reviewed
one year and discussed accordingly. The Bank carefully considers
 Premium/rebate of 10 paisa on USD exchange rate shareholders’ suggestions and implements them based
on feasibility and priority. The
suggestions that have been
implemented or are in the process of
implementation are as follows:

 Despite the sluggish economy

and adverse conditions, the Bank
generated a net profit of NPR 3.08
billion in FY 2022-23. From this
profit, NPR 1.46 billion was allocated
for debenture redemption
reserves and other statutory
regulatory reserves. The remaining
distributable profit allowed for a
proposed cash dividend of NPR
563.59 million (4.00% including tax),
subject to AGM approval. Due to
the allocation of NPR 1.46 billion for
debenture repayment, the Bank’s
effective dividend capacity was
around 14.5%, but the distributable
profit was constrained. The
amount allocated for debenture
repayment will eventually be
distributed to shareholders upon
IMPLEMENTATION OF SUGGESTIONS debenture maturity, which starts from FY 2024-25. With
PROVIDED BY SHAREHOLDERS debenture maturing worth NPR 2.16 billion in FY 2024-25,
NPR 2.5 billion in FY 2025-26, and NPR 3 billion in FY 2027-28,
In the 22nd Annual General Meeting of the Bank, various the Bank’s dividend capacity will significantly increase
suggestions from the esteemed shareholders were from FY 2024-25 onwards. The allocated amount alone
presented. will enable the distribution of at least 15% bonus shares.
Additionally, when combined with annual net profit,
The shareholders raised concerns about the low dividend the Bank is expected to provide attractive returns to
rate and suggested increasing the dividend rate in the shareholders. To strengthen capital management, the

ANNUAL 193
REPORT 2023-24
 Board has proposed issuing NPR 3.5 billion worth of “SBL  To enhance shareholder brand loyalty and attract new
8.25% Perpetual Non-Cumulative Preference Shares” at customers, the Bank has introduced the “Siddhartha
NPR 100 per share, subject to regulatory approval. Investor Savings Account.” Shareholders can receive
dividend payments directly into their account, along with
 The Bank, considering the overall economic landscape free services for the first year, including Meroshare, Demat
of the country, has adopted a cautious yet balanced, Account, Banksmart XP, Siddhartha Platinum Debit Card,
continuous, and sustainable growth approach while and Siddhartha UNO Credit Card. Additional benefits
effectively managing and mitigating various risks of Siddhartha Investor Savings Account include a 50%
associated with its operations, including credit risk, margin reduction on Locker Facility, a 25% discount on
operational risk, liquidity risk, market risk, interest rate risk, Travel Card, and a free portfolio management service. A
and foreign exchange risk. To improve quality of the loan premium/rebate of 10 paisa on USD exchange rates is also
and to improve the Turnaround Time of credit approval offered for this account.
process, the Bank established a Credit Underwriting
Department last year, which has expanded its operations.  The Bank remains committed to addressing borrower
Additionally, to further enhance and streamline the concerns, protecting depositor interests, and delivering
credit analysis process and lending procedures in a customer-centric banking services while collaborating
more systematic and data-driven manner, the Bank has with all stakeholders to move forward together. The Bank
engaged Nepal Banking Institute (NBI) as a consultant reassures shareholders of its dedication to being a strong,
to review and update its overall credit ecosystem. The successful, customer-friendly, and high-dividend-paying
Bank believes that the consultant’s recommendations institution. By building on its strengths and addressing its
will help enhance risk management, improve overall weaknesses, the Bank will continue to work according to
credit management efficiency, mitigate risks, implement its policies and plans, striving to provide optimal returns to
best credit management practices, and adopt a more shareholders.
effective lending process. During the review period, due
to the lack of significant improvement in the prevailing  With the rapid advancement of information technology,
economic scenario of the country and the absence of security concerns have become increasingly challenging.
notable progress in most economic indicators, the Bank Acknowledging the need to mitigate IT-related risks,
faced considerable challenges in loan recovery. The Bank the Bank remains vigilant in recognizing the need
has prioritized loan recovery by deploying Dedicated for an effective IT strategy, policies, and procedures,
Recovery Teams at designated branches and provincial the Bank has implemented robust cybersecurity
levels, making the recovery process more effective. measures. Continuous improvements are being made
Adequate risk provisions have been maintained for non- in encryption and network security monitoring. The Bank
performing loans, and the Bank continues to actively has successfully taken significant steps in financial fraud
utilize appropriate loan recovery mechanisms to recover prevention, IT and data security management, and
non-performing assets. The Bank’s primary goal remains upgrading hardware, networks, and system software.
sustainable growth while ensuring appropriate returns for Under the Bank’s “Digital Strategy 2025,” the Bank is
investors and safeguarding depositor interests. working on further strengthening and improving the
cybersecurity. Advanced security measures ensure
 Inspired by the Bank’s tagline “Relationships Forever,” customer data privacy and reliability. The Bank has
the Bank has established a Central Information and implemented a high-level information technology
Grievance Handling Desk to systematically address security framework to ensure customer privacy, data
customer concerns received through its nationwide security, and information reliability, as outlined in the
network. The Bank is pursuing a “Digital First” strategy and Annual Report 2022-23. To enhance service quality and
aims to enhance seamless, efficient, customer-centric operational efficiency, the Bank has fully implemented
service for customer convenience, through Artificial advanced systems such as the Core Banking System
Intelligence and other innovative technologies in the (CBS), Customer Relationship Management (CRM),
future. The Bank has been delivering financial services with and Loan Origination System (LOS). Additionally, in
a strong focus on customer-centric banking. In line with compliance with international cybersecurity policies for
this approach, the Bank has fully implemented projects payment systems, the Bank has adopted the SWIFT CSP
such as the Core Banking System (CBS) and Customer Assessment to mitigate cyber threats and attacks. To
Relationship Management (CRM) to provide high-tech further strengthen its cybersecurity measures, the Bank
and reliable services. These initiatives are expected to has conducted an audit of its information systems and
enhance the overall customer experience with the Bank, incorporated the recommendations provided by auditors,
ultimately leading to increased customer delight. ensuring a secure and technologically resilient banking
environment.

ANNUAL
194 REPORT 2023-24
 To ensure effective risk management, the Bank has non-interest income and will focus more on identifying
established a strong risk management framework, additional sources of non-interest income in the future.
implementing risk policies and procedures. The Bank
continuously identifies, measures, and manages inherent  Considering current and future challenges and
risks across various activities. Emphasis is placed opportunities, the Bank is expanding its services and
on strengthening internal control systems and risk improving service quality, developing a skilled and
management policies. The Bank adheres to regulatory motivated workforce, introducing innovative services,
guidelines, including the Risk Management Guideline, and entering new markets and regions. Despite various
Stress Testing Guideline, Capital Adequacy Framework, economic and non-economic challenges, the Bank
and ICAAP Guideline. A “Zero Tolerance Policy” is enforced remains committed to achieving its goals through timely
to ensure compliance with laws, regulations, and plans and strategies.
internal policies. Management-level committees such
as the Executive Committee and Credit Management  The Bank has already implemented most of the valuable
Committee are actively working to enhance institutional suggestions from the respected shareholders, while some
governance, internal controls, and risk oversight. are in different stages of execution. We seek continued
suggestions and support from shareholders and commit
 Under Foreign Exchange Risk, the Bank is enhancing to implementing their feedback. The Board of Directors,
its hedging mechanism to mitigate interest rate and management, employees, and the entire Siddhartha
exchange rate fluctuations. Bank family remain dedicated to making the Bank strong,
successful, customer-friendly, and capable of providing
 The Bank is identifying and investing in more profitable high returns. We sincerely appreciate the support and
sectors to optimize its deposit and investment portfolio. guidance of shareholders, customers, and stakeholders,
This strategy aims to expand investment scope, reduce whose contributions have helped the Bank reach this
risks, and achieve expected profit growth. The Bank is stage.
also gradually implementing suggestions to increase

ANNUAL 195
REPORT 2023-24
 ANNUAL
196 REPORT 2023-24
HUMAN
RESOURCE

ANNUAL 197
REPORT 2023-24
 HUMAN RESOURCE DASHBOARD
EMPLOYEE MIX AS PER AGE GROUP
EDUCATION QUALIFICATION MIX
18-30 31-40 41-50 51-60
FY
YEARS YEARS YEARS YEARS
2023-24 948 862 147 25
2022-23 1097 729 120 24
2021-22 1136 660 80 18
2020-21 1233 547 68 14
2019-20 1364 460 50 13

EMPLOYEE MIX AS PER GENDER

Male

1400 Female

1200

1000

800 TOTAL TRAINING CONDUCTED CATEGORY WISE

1225
1191
1163

1161

600
1041

NUMBER OF NUMBER OF
CATEGORY
757

400
724

705
701

PARTICIPANTS TRAINING
604

200

0 AML 538 21
2019-20 2020-21 2021-22 2022-23 2023-24
Behavioral 890 91

EMPLOYEE MIX AS PER PROVINCE WISE Credit 1,766 72

ESRM 70 1
Health & Safety 256 3
Sudur Paschim 87
Operational 2,078 64
Madhesh 210
Risk-Credit 9 5
Lumbini 236 Risk-Operation 111 11

Koshi 235
Sales and
434 8
Karnali 28
Marketing

Gandaki 165 Technical 321 35

TOTAL 6,473 311
Bagma 1,021

0 200 400 600 800 1,000 1,200

PROVINCE WISE TRAINING CONDUCTED

EMPLOYEE MIX AS PER POSITION NUMBER OF NUMBER OF

Execuve Level Staff PROVINCE
PARTICIPANTS TRAINING
Manangerial Level Staff
10 91
Support Staff
Koshi 722 31
Officer Level Staff
Assistant Level Staff Madhesh 788 28
Bagmati 3,163 187
527
Gandaki 578 21
Lumbini 826 24
10
Karnali 107 6
1344
Sudurpaschim 289 14
Total 6,473 311

ANNUAL
198 REPORT 2023-24
CORPORATE LEVEL WISE TRAINING CONDUCTED HUMAN RESOURCES OVERVIEW FOR FY 2023-24
LEVEL NUMBER OF PARTICIPANTS NUMBER OF TRAINING The HR function continues to play a pivotal role in driving
organizational success. With strategic workforce planning,
Executive 55 14 continuous capacity-building initiatives, and a focus on
employee engagement, the Bank remains well-positioned
Managerial 384 51
to sustain growth and achieve long-term business
Officer 1,233 100 objectives. Looking ahead, we remain committed to
Assistant 4,798 145 strengthening our human capital to meet the evolving
needs of our stakeholders.
Support 3 1
Total 6,473 311
GENDER-WISE HEADCOUNT DISTRIBUTION
The bank remains committed to fostering a diverse
MODE OF TRAINING and inclusive workforce. Our gender-wise headcount
distribution reflects our efforts toward achieving balanced
representation across all levels of the organization.

1,225 757
MALE 62% FEMALE 38%

As depicted in the figure, the Bank had a mix of 62% male

and 38% female employees by the close of fiscal year
2023-24

CORPORATE LEVEL-WISE EMPLOYEE DISTRIBUTION

TRAINING SOURCE
To ensure operational efficiency and a structured career
progression, the Bank maintains a well-defined corporate
level-wise employee distribution. Our approach facilitates
talent development and effective succession planning,
reinforcing our commitment to a robust workforce
structure.

The table below represents the data both in numbers

and percentage on corporate level wise distribution of
employee in each gender. With 38% of our workforce being
female, we take pride in the growing representation of
women, particularly in key roles such as Senior Officers,
Officers, and Assistant Managers.
TRAINING AND DEVELOPMENT EXPENSES
Total L&D Expenses (2023-24) NPR 47.26 Million While leadership positions have historically been male-
dominated, we are witnessing a positive shift as more
TOTAL EMPLOYEES PROMOTED DURING FISCAL YEAR women take on managerial and decision-making roles.
Through targeted leadership development programs,
Male Staff Promoted 89
mentorship initiatives, and a commitment to gender
Female Staff Promoted 57 equality, we are actively working toward greater female
Total Staff Promoted 146 participation at the executive level.

Our efforts in talent development have also yielded

EMPLOYEES FELICITATION FOR FISCAL YEAR 2023-24: 21
encouraging results in entry-level and junior roles, where
women now hold over 50% of Assistant and Trainee
EMPLOYEES LOAN FACILITIES
Assistant positions. This strong foundation paves the way
STAFF OUTSTANDING for future leaders, reinforcing our long-term commitment
S.NO. LOAN SCHEME AVAILING PRINCIPAL to workplace diversity.
LOAN AMOUNT

1 Employee Home Loan 1,051 4,584,863,674.90

Employee Motorcycle 51,795,792.22

2 275
Loan

3 Employee Personal Loan 1,107 460,222,464.02

4 Staff Vehicle Loan 85 118,194,339.51
Grand Total 2,522 4,878,893,339.14

ANNUAL 199
REPORT 2023-24
 CORPORATE LEVEL FEMALE MALE GRAND TOTAL FEMALE % MALE %
Chief Executive Officer 1 1 0% 100%
Deputy Chief Executive Officer 1 1 0% 100%
Assistant Chief Executive Officer 1 1 0% 100%
Deputy General Manager 4 4 0% 100%
Assistant General Manager 1 2 3 33% 67%
Senior Manager 2 5 7 29% 71%
Manager 1 17 18 6% 94%
Deputy Manager 4 24 28 14% 86%
Assistant Manager 2 36 38 5% 95%
Senior Officer 32 109 141 23% 77%
Officer 48 140 188 26% 74%
Junior Officer 55 143 198 28% 72%
Senior Assistant 134 215 349 38% 62%
Assistant 285 282 567 50% 50%
Junior Assistant II 3 8 11 27% 73%
Junior Assistant I 16 27 43 37% 63%
Junior Assistant 96 140 236 41% 59%
Trainee Assistant 28 21 49 57% 43%
Trainee Junior Assistant 48 29 77 62% 38%
Junior Trainee Assistant 2 10 12 17% 83%
Senior Messenger 3 3 0% 100%
Senior Driver 3 3 0% 100%
Driver 4 4 0% 100%
Grand Total 757 1225 1982 38% 62%

GEOGRAPHICAL HR STRENGTH
In FY 2023-24, our HR strength across various geographical locations remained stable, aligning with our strategic expansion
and service delivery enhancement. The bank continuously evaluates staffing requirements to ensure an optimal workforce
distribution across all operational regions. The table below represents Bagmati region with highest total of 1010 headcounts as
this region has most of the branches and central office of the Bank.

PROVINCE FEMALE MALE GRAND TOTAL FEMALE MALE

Bagmati 489 521 1010 48.40% 51.69%
Gandaki 66 98 164 40.20% 59.80%
Karnali 6 21 27 22.20% 77.80%
Koshi 73 162 235 31.10% 68.90%
Lumbini 61 176 237 25.70% 74.30%
Madhesh 43 174 217 19.80% 80.20%
Sudurpaschim 19 68 87 21.80% 78.20%
Out of Country 5 5 0.00% 100.00%
Grand Total 757 1225 1982 38% 62%

HR ACTIVITIES AND HR STATUS FOR FY 2023-2024

The bank has seen steady growth in HR metrics, underscoring our commitment to employee well-being, productivity, and
business growth. The following key figures highlight our progress:

DETAIL FY 2021-22 FY 2022-23 FY 2023-24 GROWTH FROM LAST FISCAL YEAR (%)
Permanent Staffs 1897 1970 1982 0.81%
Staff Per Branch 9.98 10.05 10.1 0.50%
DETAIL FY 2021-22 FY 2022-23 FY 2023-24 GROWTH FROM LAST FISCAL YEAR (%)
Per staff Cost 1.18 million 1.19 million 1.24 million 4.20%
Business Per Staff (NPR) 201.67 million 217 million 226 million 4.15%
ANNUAL
200 REPORT 2023-24
 Workforce Growth  Run for Autism Marathon in Kathmandu, organized by
The total number of permanent staff increased from Round Table Nepal in collaboration with Kathmandu
1,970 in FY 2022-23 to 1,982 in FY 2023-24, reflecting a 0.81% Marathon.Furthermore, in reaffirmation of its commitment
growth. This steady increase ensures the Bank maintains to women-centric initiatives, the Bank distributed
a skilled workforce to support its expanding operations. specially curated gift boxes to all its female employees,
including outsourced personnel, across the country on
 Staff Per Branch the occasion of Teej Festival. The Bank also conducted
The average number of staff per branch increased from cervical cancer and breast cancer awareness program
10.05 in FY 2022-23 to 10.1 in FY 2023-24, marking a 0.50% for its female employees during the occasion of
growth. This demonstrates our strategic hiring to maintain International Women’s Day.
service efficiency across branches.
These engagements reflect the Bank’s dedication to
 Per Staff Cost
enhance a healthy, active, and inclusive work environment,
The per-staff cost rose from 1.19 million in FY 2022-23 to
strengthening team spirit, and promoting overall staff well-
1.24 million in FY 2023-24, a 4.20% increase. This growth
being.
reflects our ongoing commitment to competitive
compensation, employee benefits, and professional
development initiatives. SERVICE RECOGNITION
In recognition of the unwavering dedication and long-
 Business per Staff standing commitment of our staff, Siddhartha Bank proudly
Business per staff grew from 217 million in FY 2022-23 to celebrated the 15 Years’ Service Recognition Felicitation
226 million in FY 2023-24, representing a 4.15% increase. Ceremony on its 22nd Anniversary. This event honored
This highlights the improved productivity and efficiency of employees who have completed 15 years of exemplary
our workforce, contributing to the Bank’s overall financial service, contributing significantly to the Bank’s growth and
growth. success. The ceremony was a testament to the Bank’s
appreciation for the hard work, loyalty, and dedication of its
STAFF ENGAGEMENT ACTIVITIES employees.
As part of its commitment to staff engagement and well-
being, the Bank actively participates in various sporting This year, the felicitation program honored a total of 21 staff
events and continues to organize the Siddhartha Sports Fest members from various departments, including Executives,
as an annual tradition. In the fiscal year 2023-24, the Bank Liability - Institutional & HNI, Circle Office Operations, and
successfully conducted Siddhartha Sports Fest, featuring more. These individuals have played pivotal roles in driving
two internal sporting events namely Futsal and Table Tennis operational excellence and strengthening customer
Tournament under both Men’s and Women’s categories relationships.
with the representation of staff from all branches across the
KEY HIGHLIGHTS OF THE RECOGNIZED INDIVIDUALS INCLUDE:
country and head office functions.

 Leadership contributions by Assistant Chief Executive

In addition to conducting internal sporting events, the Bank
Officers and Senior Managers.
participated in 14 external corporate futsal and cricket
tournaments held in various locations across the country  Operational excellence in branches and specialized units
during the fiscal year. Notably, the Bank won the title of such as CCAC and Circle Offices.
following prestigious tournaments:
 Continued adherence to the Bank’s commitment to
 Round Table Futsal Tournament 2023, organized by Round innovation and customer-eccentric solutions.
Table Nepal in Kathmandu. The felicitation underscores our appreciation for their
loyalty and hard work in making the Bank a trusted name
 Inter Bank Futsal Tournament 2081, organized by Nepal in the financial sector. We look forward to their continued
Rastra Bank in Birgunj. contributions in the years ahead.

 4th INFICARE Inter Remittance Corporate Futsal 2024,

organized by INFICARE Pvt. Ltd.
TOTAL NUMBER OF NEW RECRUITMENT
AND PROMOTION DETAIL
As of FY 2023-24, the total number of employees in the Bank
Furthermore, teams representing Madhesh Province
stood at 1,982 of which 101 were in managerial positions.
showcased exceptional performance, securing first position
Among the total workforce, 61.81% (1,225 employees) were
in the Slow Scooter Race and second position in the Quiz
male, and 38.19% (757 employees) were female.
Competition, both organized by Nepal Rastra Bank in Birgunj.
Recognizing the importance of mental well-being and
For recruiting new employees, the Employee Service
work-life balance, the Bank actively encouraged its staff for
Regulations 2080 have been implemented. After evaluating
participation in marathon events, including:
performance during the probationary period, 162 capable
 Kantipur Half Marathon in Kathmandu, organized by and eligible individuals from external sources were identified
Kantipur Media Group. and appointed as new employees. Among them, 152
employees were appointed to assistant-level positions, and
10 employees were appointed to officer-level positions.

ANNUAL 201
REPORT 2023-24
 ANNUAL
202 REPORT 2023-24
 ANNUAL 203
REPORT 2023-24
 The Bank has also promoted 146 employees through an development. A total of 6,473 participants engaged in 311
internal competition process. The total number of employees training sessions, covering a wide range of topics critical to
providing 20, 15, and 10 and 5 years of continuous service our growth and success. Among the standout categories,
were 14, 85, 251 and 1,249 respectively. the Credit training saw 1,753 participants across 71 sessions,
with an additional 13 participants in a specialized Credit
TRAINING AND DEVELOPMENT session. The Behavioral category also experienced significant
In FY 2023-24, the Bank continued its commitment to interest, with 890 participants across 91 sessions, reflecting a
employee learning and development, organizing 311 training strong focus on personal and professional growth. Training
programs and engaging 6,473 participants across different in Operational areas involved 2,078 participants, further
levels and regions. The data reflects the total number of highlighting our dedication to enhancing operational
participants and training sessions conducted in both virtual efficiency and excellence. Other categories, including
and physical modes. In the virtual mode, there were 22 AML, Sales and Marketing, Health & Safety, and Technical,
training sessions with a total of 3,105 participants. On the also experienced robust participation, contributing to a
other hand, the physical mode had 289 training sessions with comprehensive employee development strategy. These
3,368 participants. training initiatives reflect our ongoing commitment to
nurturing a highly skilled and knowledgeable workforce,
Our training initiatives reached 2,526 female participants empowering our employees across multiple domains for
through 90 programs, reinforcing our commitment to continued success.
empowering women in banking. Meanwhile, 3,947 male
participants participated in 221 training sessions, ensuring TRAINING SOURCE NO. OF TRAINING
broad engagement across the workforce. While participation
Training Institutes 223
among male employees remains higher, we recognize this
as an opportunity to further enhance training accessibility In house (Internal Resource Person) 49
for female employees, encouraging greater representation In house (External Resource Person) 39
at leadership levels. Total 311

Our efforts have been particularly impactful in Province 3, The distribution of training sessions reflects a strategic mix of
where the highest participation was recorded, reflecting a external and internal expertise, reinforcing our commitment
strong learning culture and active employee engagement. to a comprehensive employee development program. A
We are equally encouraged by the significant participation total of 311 training sessions were conducted, with 223 of
in Provinces 1, 2, 4, and 5, where a substantial number of them organized through Training Institutes, highlighting the
employees benefited from structured learning opportunities. value of external expertise and resources. In-house training
The training numbers in Provinces 6 and 7 remain relatively sessions also played a key role, with 49 sessions delivered
lower as HR portfolio in these regions are lesser compared to by our internal resource persons, demonstrating the
other regions. organization’s ability to leverage its own talent. Additionally,
39 In-house training sessions were facilitated by external
Our largest training engagement was at the Assistant resource persons, blending both internal and external
level, where 4,798 employees participated in 145 sessions, knowledge to provide a richer learning experience. This
demonstrating our commitment to equipping front line staff approach ensures that our employees receive a well-
with essential skills for operational excellence. rounded education, fostering growth through both internal
insights and external perspectives.
Significant training efforts were also directed towards
the Officer level, with 1,233 participants attending 100
TRAINING LOCATION
programs, ensuring they are well-prepared for their evolving
responsibilities. Similarly, 51 training sessions were conducted COUNTRY NO. OF PARTICIPANTS NO. OF TRAINING
for 384 employees in managerial roles, reinforcing leadership Nepal 6,426 284
development within the organization.
Abroad 47 27

Recognizing the critical role of executives in shaping the Total 6,473 311
Bank’s strategic direction, we provided 14 specialized training
sessions for 55 senior leaders, fostering innovation and Our training programs have reached a broad and diverse
effective decision-making. Additionally, support staff also audience, both locally and internationally. A total of 6,473
benefited from training initiatives, ensuring that learning participants attended 311 training sessions, with the majority,
opportunities reach all segments of our workforce. 6,426 participants, engaged in 284 sessions held within Nepal.
This reflects the strong commitment to skill development and
By prioritizing skill enhancement at every level, we are knowledge enhancement across the country. Additionally, 47
strengthening our human capital, fostering career growth, participants from abroad participated in 27 training sessions,
and reinforcing our commitment to service excellence and highlighting our organization’s global reach and dedication
sustainable development. to providing valuable learning experiences to employees
beyond national borders. This distribution underscores our
In the past year, our organization has witnessed strong inclusive approach to employee development, ensuring that
and diverse participation in various training programs, both local and international exposure is given to the teams
underscoring our commitment to continuous skill so that they have access to the resources they need to
thrive.

ANNUAL
204 REPORT 2023-24
PERFORMANCE MANAGEMENT SYSTEM from the respective medical allowance and the surplus
allowance if any is released to the employee. If the premium
The Performance Management System (PMS) at Siddhartha amount exceeds the eligible allowance, the Bank covers the
Bank continues to play a pivotal role in assessing and remaining amount as well.
enhancing the quality of our human capital. During FY 2023-
24, the PMS has been instrumental in providing constructive LIFE INSURANCE AND ACCIDENTAL INSURANCE POLICY
feedback, guiding decisions related to promotions, pay The Bank provides a 20 year endowment life insurance policy
raises, training, and career development, and ensuring for its permanent employee and the coverage amount is
alignment of individual performance with organizational fixed level wise ranging from 1 lakh to 7.5 lakhs. Additionally,
goals. As we transition into FY 2081-82, the focus remains The Bank provides accidental Insurance coverage, also
on timely execution of performance reviews, adherence based on employee level with coverage amount from
to updated appraisal provisions, and fostering a culture of ranging from NPR 10 lakh to 75 lakhs.
transparency and fairness in performance evaluations.
LOAN FACILITIES
In line with the Employee Service Bylaws 2023, the appraisal Employees are provided with various staff loan facilities as
system has been amended to assign a 75% weightage to categorized below:
functional scores and a 25% weightage to competency
scores (behavioral and technical). This change aims  Employee Home Loan Scheme: Eligible Employees are
to enhance the reliability and fairness of performance entitled of Home Loan equivalent to 140 months gross
evaluations. salary with the maximum ceiling of Rs. 1 Crore 75 lakhs.

To minimize subjectivity, supervisors at the Bank are always  Personal Loan: Eligible employee are entitled of Personal
encouraged to adopt a structured approach to competency loan equivalent to 12 months gross salary with the
scoring, focusing on observable and measurable behaviors. maximum ceiling of Rs. 10 lakhs (with 100 % of term loan or
Collaborative definition of KRAs (Key Result Areas) and KPIs with facility of 50% OD and 50% term loan)
(Key Performance Indicators) using the SMART framework
 Motorcycle Loan: Eligible employee are entitled of
(Specific, Measurable, Achievable, Relevant, Time-bound) has
motorcycle loan equivalent to maximum ceiling of Rs 4
been promoted.
lakhs.

The PMS at Siddhartha Bank remains a critical tool for driving  Staff Vehicle Loan Scheme: Employee with level Assistant
employee performance and organizational success. By Manager and above are provided with vehicle facility with
adhering to the updated appraisal provisions, ensuring the limit ranging from NPR 22 lakhs to 65 lakhs.
timely execution of performance reviews, and fostering a
culture of transparency and fairness, we aim to strengthen
GRATUITY BENEFITS
our human capital and achieve our strategic objectives.
Employees are provided with gratuity benefits on their
retirement based upon the eligibility criteria as per their
REMUNERATION AND BENEFITS service period with the Bank.

At Siddhartha Bank, we recognize that our employees are

our most valuable assets. Our remuneration and benefits
SUCCESSION MANAGEMENT PROCESS
strategy is designed to attract, retain, and motivate top
At Siddhartha Bank, we recognize that sustainable growth
talent by ensuring competitive and equitable compensation
and operational continuity are anchored in robust
aligned with industry standards.
leadership. Our succession management process is
designed to identify, nurture, and prepare future leaders
The bank’s Employee Service Regulations 2080 have been
who embody our core values of Sustainability, Transparency,
implemented to govern staff remuneration, ensuring fair
Innovation, Integrity, and Customer Centricity.
compensation practices and clear career progression.
Compensation packages include:
Key highlights of the process include:
 Competitive base salaries
 Allowances and bonuses linked to performance
 Leadership Pipeline Development: We have
 Market adjustments to remain aligned with industry
institutionalized programs to assess and develop talent
benchmarks
at all levels, ensuring a steady pipeline of capable leaders
 The major benefits provided by the Bank are explained
who can take on critical roles as part of their career
below:
progression.

MEDICAL ALLOWANCE AND INSURANCE  Performance and Potential Assessment: Our structured
Bank has a comprehensive approach to employee frameworks evaluate employees on both their
healthcare comprising of both medical allowance and performance in current roles and their potential for higher
medical insurance. Employees are provided annual medical responsibilities, enabling data-driven decision-making.
allowances based on their level. In addition, Bank also offers
a Group Medical Insurance Package with coverage of up to  Focused Development Plans: Tailored learning and
NPR 100,000.00 for the employees (along with their parents development initiatives, mentorship opportunities, and
and two children). The cost of the premium is deducted rotational assignments are provided to high-potential
employees to prepare them for future leadership roles.

ANNUAL 205
REPORT 2023-24
  Diversity and Inclusion: Succession planning at manner. This committee ensures all complaints and disputes
Siddhartha Bank is aligned with our commitment to are resolved fairly, promptly, and transparently, fostering a
fostering an inclusive workplace that values diverse culture of trust and respect within the organization.
perspectives, ensuring our leadership represents the
broad spectrum of our stakeholders.
INITIATIVES TOWARDS DIGITIZATION,
 Governance and Oversight: The Senior Management and SUSTAINABILITY AND RISK MANAGEMENT
BOD actively oversees the succession planning process,
ensuring it aligns with the Bank’s strategic priorities and DIGITIZATION INITIATIVE OF THE HUMAN
risk management practices. RESOURCE DEPARTMENT
To enhance the efficiency, transparency, and effectiveness
By integrating these measures into our HR strategy, of HR operations, the Human Resource Department has
Siddhartha Bank is poised to maintain a resilient leadership embarked on a comprehensive digitization initiative. This
structure, ensuring business continuity and driving long-term endeavor focuses on upgrading systems, streamlining
value creation for all stakeholders. processes, and automating routine tasks to establish
a modern, technology-driven HR function aligned with
BANK’S CONTRIBUTION TO EMPLOYEE the Bank’s broader digital transformation objectives. Key
milestones of this initiative include:
HEALTH SAFETY AND WELL BEING
IMPLEMENTATION OF A NEW HUMAN CAPITAL MANAGEMENT SYSTEM
At Siddhartha Bank, ensuring the safety and well-being of
(HCMS)
our employees is a top priority. Throughout the year, we
Siddhartha Bank has successfully introduced Employee
have implemented several initiatives and programs aimed
Wise, a cutting-edge Human Capital Management System
at enhancing workplace health and safety, promoting a
(HCMS), as a pivotal step in its HR digitization journey.
supportive work environment, and empowering employees
This platform serves as the foundation for seamless HR
to feel protected and valued.
operations, facilitating efficient management of the Bank’s
human resources by providing a mobile-friendly HR apps
BALANCED WORK HOURS FOR EMPLOYEE WELL-BEING for employees to access leave management, payslips,
We recognize that maintaining a healthy work-life balance attendance tracking, and self-service portals .This year’s
is essential for employee productivity and overall well-being. strategic focus is on expanding the system by developing
Our standard office hours, from 09:30 AM to 05:00 PM (Sunday and implementing comprehensive HR operational
to Thursday) and 09:30 AM to 02:00 PM (Friday) ensure modules. These enhancements aim to improve employee
employees have structured work schedules with ample engagement, enable self-service functionalities, and boost
time for personal activities and rest. This balance is a critical overall operational efficiency.
factor in preventing burnout and enhancing job satisfaction,
contributing to a positive work culture. FORMALIZATION OF THE BUDGET MANAGEMENT SYSTEM
An integrated Budget Management System, aligned with the
PROVINCE-LEVEL FIRE SAFETY & EARTHQUAKE Human Capital Management System, has been rigorously
PREPAREDNESS TRAINING tested to optimize financial planning and tracking within HR
To strengthen our employees’ knowledge and preparedness processes. This system is designed to enable data-driven
for emergencies, we organized three province-level Fire budget allocation across critical HR functions, such as
Safety and Earthquake Preparedness Training, attended recruitment, training, employee benefits, and other related
by a total of 256 participants across different branches. activities, fostering more effective resource management.
These comprehensive training sessions covered evacuation
procedures, risk mitigation strategies, and emergency
LEARNING MANAGEMENT SYSTEM (LMS): FEASIBILITY STUDY &
response techniques to ensure our teams are ready to act IMPLEMENTATION
swiftly during critical situations. To promote continuous and impactful learning, the HR
Department conducted a comprehensive feasibility study
FIRST AID BOX INSTALLATION and assessment of various Learning Management Systems
As part of our ongoing commitment to health and safety, we (LMS). This evaluation identifies the most suitable solution for
have installed first aid boxes in all office premises. These first- the Bank, emphasizing accessibility, efficiency, and scalability
aid kits are strategically placed to ensure easy and quick of training programs. The proposed LMS will focus on:
access in case of minor injuries or emergencies.
 Creating personalized learning paths tailored to
IMPLEMENTATION OF WHISTLE-BLOWING POLICY AND PORTAL employees’ roles, objectives, and performance.
To uphold integrity and transparency in our workplace, we
 Enabling automated tracking and reporting of training
have circulated a Whistle-Blowing Policy and introduced a
and skill development activities.
dedicated Whistle-Blowing Portal. This initiative encourages
employees to report any unethical practices or grievances
Following this study, the department plans to commence
confidentially, ensuring their voices are heard without fear of
the LMS implementation process in the next fiscal year. The
retaliation.Proper Grievance Handling Committee
We have established a Grievance Handling Committee to
address employee concerns in a structured and impartial

ANNUAL
206 REPORT 2023-24
goal is to seamlessly integrate the LMS with existing systems COMMUNITY ENGAGEMENT PROGRAMS
to establish a robust framework for employee learning and To reinforce the Bank’s commitment to sustainability
development, fostering a culture of continuous growth and beyond the workplace, the HR department organizes and
upskilling encourages employee participation in community-focused
activities:
By embracing digitization, Siddhartha Bank’s HR Department
 Tree plantation drives in partnership with local
is poised to evolve into a more agile and strategic function.
environmental organizations in collaboration with CSR
This transformation empowers employees while advancing
Division of the Bank.
the Bank’s mission of innovation and operational excellence.

 Financial literacy campaigns aimed at empowering local

SUSTAINABILITY INITIATIVES BY THE communities to adopt sustainable economic practices.
HUMAN RESOURCE DEPARTMENT
The Human Resource Department at Siddhartha Bank  Volunteering programs that engage employees in clean-
is committed to integrating sustainability into its core up drives, renewable energy projects, or educational
operations and fostering an environmentally conscious initiatives on sustainability.
culture among employees.
 Reward and recognition programs to celebrate employee
contributions to CSR activities, fostering a culture of active
PAPERLESS HR OPERATIONS
participation.
Transitioning to paperless HR operations is a key step in
reducing the environmental impact of administrative
These initiatives underline the Human Resource Department’s
processes. This includes:
pivotal role in fostering sustainability at Siddhartha Bank.
 Implementing digital documentation for employee By integrating eco-friendly practices into daily operations,
records, contracts, and onboarding processes. enhancing employee awareness, and promoting active
community involvement, the HR department contributes to
 Adopting e-signature tools for approvals and official the broader mission of achieving a sustainable future.
communications.
RISK MANAGEMENT INITIATIVES OF THE HR
 Issuing electronic pay slips and tax certificates to
DEPARTMENT AT SIDDHARTHA BANK
eliminate unnecessary paper usage.
To strengthen the resilience and effectiveness of its
workforce, the Human Resources (HR) Department at
 Leveraging HR software to streamline attendance,
Siddhartha Bank is committed to implementing a series
performance reviews, and training records digitally.
of targeted risk management initiatives. These initiatives
address critical vulnerabilities, enhance preparedness,
GREEN OFFICE POLICIES and ensure compliance with regulatory and operational
The HR department actively promotes green office policies standards.
to contribute to the Bank’s efforts in lowering its carbon
footprint. Initiatives include:
WORKFORCE RISK ASSESSMENT FRAMEWORK
 Supporting remote work arrangements to reduce energy The HR Department has developed a comprehensive annual
consumption at physical office locations where feasible. plan designed to identify, assess, and mitigate HR-related
risks. This framework will focus on:
 Ensuring energy-efficient workspaces by installing LED
lighting, optimizing air conditioning usage, and turning off  Talent Shortages: Conducting regular assessments of
devices when not in use. current and future workforce needs, identifying skill gaps,
and implementing strategic recruitment and retention
 Setting up waste segregation systems and promoting the strategies.
use of reusable or recyclable office supplies.
 Compliance Violations: Ensuring adherence to labor
laws, industry standards, and internal policies through
SUSTAINABILITY TRAINING
regular audits and compliance training.
Embedding sustainability into the organizational culture
requires targeted training programs for employees. The HR  Workforce Disruptions: Preparing for potential
department facilitates this through: disruptions such as high turnover, labor disputes, or
operational bottlenecks by developing contingency plans
 Integrating sustainability topics into orientation sessions
and succession planning strategies.
for new hires and in-house sessions.

 Conducting periodic workshops to educate staff on

energy-saving practices, responsible resource usage, and
environmental awareness.

ANNUAL 207
REPORT 2023-24
 CYBERSECURITY AWARENESS TRAINING
To mitigate cybersecurity risks, the HR Department will:  Team Formation: Identifying and training employees
to serve in designated roles during crises, ensuring
 Develop and deliver tailored training programs for representation from diverse departments.
employees across all levels, focusing on:
 Protocol Development: Establishing clear and actionable
g
Data protection practices. protocols for managing various crisis scenarios, including:
g
Phishing prevention techniques. g
Natural disasters (e.g., earthquakes, floods).

 Secure handling and sharing of sensitive information. g

Financial instability affecting employee well-being.

 Collaborate with the IT Department to integrate g

Health emergencies, such as pandemics or workplace
cybersecurity awareness into onboarding programs and safety incidents.
periodic refresher training sessions.
 Simulated Drills: Conducting regular drills, fire and
 Regularly update training content to reflect emerging earthquake safety training along with scenario-based
cyber threats and regulatory requirements.Crisis exercises to test preparedness and improve response
Management Teams strategies

CRISIS MANAGEMENT TEAMS By institutionalizing these risk management practices, the

The HR Department has established specialized Business HR Department aims to enhance workforce resilience,
Continuity Committee to respond effectively to unforeseen safeguard organizational assets, and support Siddhartha
events. Key aspects include: Bank’s long-term strategic objectives.

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208 REPORT 2023-24
BANK’S CREDIT RATING
Credit rating agency ICRA Nepal Limited on 5 February 2024 has given the Bank a moderately safe rating of “[ICRANP-IR] BBB+
(Pronounced as ICRA NP Issuer Rating Triple B Plus)”. Organizations that receive this rating are considered d to have moderate
degree of safety regarding the timely servicing of financial obligations.

with connuaon of ‘Watch with

ICRA Nepal has also reaffirmed the rang assigned to the bank's subordinated debentures with connuaon of ‘Watch

bank’s

moderaon in SBL’s profitability indicators

SBL’s

bank’s

ANNUAL 209
REPORT 2023-24
 –

– ’s porolio granularity connues to remain among the best in

– bank’s
Further the bank’s improving

could remain a posive in ‘ ’

bank’s

– The bank’s er

’s overall CRAR

bank’s ability to withstand

– ’s profitability indicators

term, the bank’s ability to c

ANNUAL
210 REPORT 2023-24
 – 4

, SBL’s shareholding is divided among

, SBL’s CRAR was 1

–
–
–
–
–

ANNUAL 211
REPORT 2023-24
 ANNUAL
212 REPORT 2023-24
that the informaon herein is true, such informaon is provided ‘as is’ without any warranty of any kind, and ICRA Nepal in

ANNUAL 213
REPORT 2023-24
 FINANCIALS OF
SIDDHARTHA BANK
LIMITED

ANNUAL
214 REPORT 2023-24
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REPORT 2023-24
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 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As on 15 July, 2024 In NPR

GROUP BANK
NOTE CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Assets

Cash and Cash Equivalent 4.1 22,749,858,078 11,571,313,935 22,739,728,891 11,554,080,479

Due from Nepal Rastra Bank 4.2 9,453,753,577 8,879,504,444 9,453,753,577 8,879,504,444

Placements With Bank and Financial

4.3 6,562,120,179 5,011,346,934 6,562,120,179 5,011,346,934
institutions

Derivative Financial instruments 4.4 4,976,896 17,320,155 4,976,896 17,320,155

Other Trading Assets 4.5 197,570,521 230,616,945 18,998,790 121,209,048

Loan and Advances to BFIs 4.6 5,767,824,492 5,170,773,907 5,767,824,492 5,170,773,907

Loans and Advances to Customers 4.7 195,485,263,229 183,992,534,636 195,473,382,509 183,982,742,234

Investment Securities 4.8 48,169,685,969 62,728,867,192 47,978,959,412 62,480,476,034

Current Tax Assets 4.9 218,974,001 267,328,784 217,840,347 263,764,947

Investment in Subsidiaries 4.10 - - 51,000,000 51,000,000

Investment in Associates 4.11 - - - -

Investment Property 4.12 727,570,174 654,537,489 727,570,174 654,537,489

Property and Equipment 4.13 3,520,861,355 3,579,515,879 3,495,827,216 3,548,089,447

Goodwill and intangible Assets 4.14 147,496,201 167,612,308 146,146,602 166,000,283

Deferred Tax Assets 4.15 - - - -

Other Assets 4.16 4,746,408,796 4,073,870,027 4,703,288,420 4,050,241,118

Total Assets 297,752,363,467 286,345,142,636 297,341,417,505 285,951,086,519

Liabilities

Due to Bank and Financial institutions 4.17 3,578,162,810 11,613,657,572 3,578,162,810 11,613,657,572

Due to Nepal Rastra Bank 4.18 391,922,787 288,453,474 391,922,787 288,453,474

Derivative Financial instruments 4.19 3,984,885 23,887,253 3,984,885 23,887,253

Deposits from Customers 4.20 240,980,783,485 223,307,001,273 241,329,082,024 223,654,669,691

Borrowing 4.21 5,964,375,769 7,312,480,160 5,964,375,769 7,312,480,160

Current Tax Liabilities 4.9 - - - -

Provisions 4.22 - - - -

Deferred Tax Liabilities 4.15 656,753,735 489,092,725 669,639,275 501,929,292

Other Liabilities 4.23 6,031,822,104 5,941,576,983 5,672,397,480 5,586,859,110

Debt Securities Issued 4.24 11,662,559,000 11,662,559,000 11,662,559,000 11,662,559,000

Subordinated Liabilities 4.25 - - - -

Total Liabilities 269,270,364,575 260,638,708,440 269,272,124,030 260,644,495,552

Equity

Share Capital 4.26 14,089,980,190 14,089,980,190 14,089,980,190 14,089,980,190

Share Premium - - - -

Retained Earnings 677,779,733 756,129,848 580,361,617 663,610,437

Reserves 4.27 13,487,023,315 10,639,410,976 13,398,951,668 10,553,000,339

Total Equity Attributable to Equity Holders 28,254,783,238 25,485,521,014 28,069,293,475 25,306,590,967

ANNUAL
220 REPORT 2023-24
 GROUP BANK
NOTE CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Non-controlling Interest 227,215,655 220,913,182 - -

Total Equity 28,481,998,892 25,706,434,196 28,069,293,475 25,306,590,967

Total Liabilities and Equity 297,752,363,467 286,345,142,636 297,341,417,505 285,951,086,519

Contingent Liabilities and Commitment 4.28 37,210,804,262 47,726,822,450 35,968,274,654 47,603,411,987

Net Assets Value Per Share 200.53 180.88 199.21 179.61

PRAMESH SHRESTHA MANOJ KUMAR KEDIA NARENDRA KUMAR AGRAWAL As per our attached report of
HEAD STRATEGY & FINANCE CHAIRMAN RAHUL AGRAWAL even date
DINESH SHANKER PALIKHE
SUNDAR PRASAD KADEL ANKIT KEDIA AMAN UPRETY
CHIEF EXECUTIVE OFFICER MINA KUMARI SAINJU PARTNER
DIRECTORS FOR S.A.R. ASSOCIATES
CHARTERED ACCOUNTANTS
Date: December 06, 2024
Place: Kathmandu, Nepal

ANNUAL 221
REPORT 2023-24
 CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the year ended July 15, 2024 In NPR

GROUP BANK
NOTE CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Interest Income 4.29 25,735,251,088 27,709,848,736 25,716,027,983 27,659,998,067

Interest Expense 4.30 17,774,790,449 19,478,276,795 17,785,958,012 19,486,423,098

Net Interest Income 7,960,460,639 8,231,571,941 7,930,069,971 8,173,574,969

Fee and Commission Income 4.31 1,966,656,444 1,816,905,447 1,815,388,806 1,693,079,336
Fee and Commission Expense 4.32 413,511,287 374,228,787 389,054,337 347,458,421

Net Fee and Commission Income 1,553,145,157 1,442,676,660 1,426,334,469 1,345,620,915

Net Interest, Fee and Commission Income 9,513,605,795 9,674,248,601 9,356,404,440 9,519,195,884
Net Trading Income 4.33 242,791,810 188,745,057 239,844,593 202,703,890
Other Operating Income 4.34 371,865,471 330,805,167 381,052,402 336,328,302

Total Operating Income 10,128,263,077 10,193,798,824 9,977,301,435 10,058,228,076

Impairment Charge/(Reversal) for Loans

4.35
and Other Losses 1,051,123,141 1,187,561,177 1,051,123,141 1,187,561,177

Net Operating Income 9,077,139,936 9,006,237,647 8,926,178,295 8,870,666,900

Operating Expense

Personnel Expenses 4.36 3,029,685,273 2,896,297,115 2,977,901,219 2,852,235,828

Other Operating Expenses 4.37 1,004,074,465 934,306,821 985,628,185 917,442,986
Depreciation & Amortisation 4.38 488,209,362 456,879,613 478,149,579 448,006,336

Operating Profit 4,555,170,837 4,718,754,098 4,484,499,312 4,652,981,749

Non Operating Income 4.39 11,264,646 13,471,787 11,264,646 13,471,787

Non Operating Expense 4.40 19,997,998 101,194,542 19,997,998 101,194,542

Profit Before Income Tax 4,546,437,485 4,631,031,344 4,475,765,961 4,565,258,995

Income Tax Expense 4.41

Current Tax 1,455,418,185 1,436,635,657 1,428,499,479 1,412,442,144
Deferred Tax (31,261,794) (10,533,501) (32,762,202) (13,954,496)
Profit for the Period 3,122,281,093 3,204,929,188 3,080,028,684 3,166,771,347
Profit Attributable to:

Equity Holders of the Bank 3,089,707,163 3,174,361,596 3,080,028,684 3,166,771,347

Non-Controlling Interest 32,573,931 30,567,592 - -
Profit for the Period 3,122,281,093 3,204,929,188 3,080,028,684 3,166,771,347
Earnings Per Share

Basic Earnings Per Share 21.93 22.53 21.86 22.48

Diluted Earnings Per Share 21.93 22.53 21.86 22.48

PRAMESH SHRESTHA MANOJ KUMAR KEDIA NARENDRA KUMAR AGRAWAL As per our attached report of
HEAD STRATEGY & FINANCE CHAIRMAN RAHUL AGRAWAL even date
DINESH SHANKER PALIKHE
SUNDAR PRASAD KADEL ANKIT KEDIA AMAN UPRETY
CHIEF EXECUTIVE OFFICER MINA KUMARI SAINJU PARTNER
DIRECTORS FOR S.A.R. ASSOCIATES
CHARTERED ACCOUNTANTS
Date: December 06, 2024
Place: Kathmandu, Nepal

ANNUAL
222 REPORT 2023-24
 CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

For the year ended July 15, 2024 In NPR

GROUP BANK

NOTE CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Profit for the year 3,122,281,093 3,204,929,188 3,080,028,684 3,166,771,347

Other comprehensive income, net of

income tax

a) Items that will not be reclassified to

profit or loss
Gains/(losses) from investments in
equity instruments measured at fair 694,668,384 797,272,994 699,832,985 795,411,336
value
Gains/(losses) on revalution - - - -

Actuarial gains/(losses) on defined

(6,718,876) 126,790,334 (6,718,876) 126,790,334
benefit plans

Income tax relating to above items (198,922,804) (277,218,998) (200,472,185) (276,660,501)

Net other comprehsive income that will
489,026,704 646,844,330 492,641,925 645,541,169
not be reclassified to profit or loss

b) Items that are or may be reclassified to

profit or loss

Gains/(losses) on cash flow hedge - - - -

Exchange gains/(losses) (arising from

translating financial assets of foreign - - - -
operation)

Income tax relating to above items - - - -

Reclassify to profit or loss - - - -

Net other comprehsive income that are

- - - -
or may be reclassified to profit or loss

c) Share of other comprehensive income

of associate accounted as per equity - - - -
method

Other comprehensive income for the

489,026,704 646,844,330 492,641,925 645,541,169
year, net of income tax

Total comprehensive income for the year 3,611,307,797 3,851,773,518 3,572,670,608 3,812,312,516

Total comprehensive income

attributable to:

Equity holders of the Bank 3,580,505,325 3,820,567,377 3,572,670,608 3,812,312,516

Non-controlling interest 30,802,473 31,206,141 - -

Total comprehensive income for the

3,611,307,797 3,851,773,518 3,572,670,608 3,812,312,516
period

PRAMESH SHRESTHA MANOJ KUMAR KEDIA NARENDRA KUMAR AGRAWAL As per our attached report of
HEAD STRATEGY & FINANCE CHAIRMAN RAHUL AGRAWAL even date
DINESH SHANKER PALIKHE
SUNDAR PRASAD KADEL ANKIT KEDIA AMAN UPRETY
CHIEF EXECUTIVE OFFICER MINA KUMARI SAINJU PARTNER
DIRECTORS FOR S.A.R. ASSOCIATES
CHARTERED ACCOUNTANTS
Date: December 06, 2024
Place: Kathmandu, Nepal

ANNUAL 223
REPORT 2023-24
 CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended July 15, 2024 In NPR

GROUP BANK

CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Cash Flows from Operating Activities

Interest Received 22,315,035,557 24,011,447,835 22,322,880,174 24,015,818,342

Fees and Other Income Received 1,976,701,562 1,821,241,417 1,815,388,806 1,693,079,336

Dividend Received - - - -

Receipts from Other Operating Activities 367,826,906 297,042,639 368,521,296 296,979,153

Interest Paid (16,604,382,556) (18,307,250,295) (16,617,639,317) (18,318,104,403)

Commission and Fees Paid (413,321,263) (374,228,787) (389,054,337) (347,458,421)

Cash Payment to Employees (2,501,308,948) (2,178,465,601) (2,449,524,894) (2,134,404,314)

Other Expense Paid (1,026,351,414) (1,038,207,594) (1,005,626,182) (1,018,637,527)

Operating Cash Flows Before Changes in

4,114,199,845 4,231,579,613 4,044,945,546 4,187,272,166
Operating Assets and Liabilities

(Increase)/Decrease in Operating Assets

Due from Nepal Rastra Bank (453,040,085) (3,270,264,958) (453,040,085) (3,270,264,958)

Placement with Bank and Financial Institutions (1,550,773,245) (4,691,033,679) (1,550,773,245) (4,691,033,679)

Other Trading Assets (40,080,885) 7,052,159 (18,998,790) -

Loan And Advances to Bank and Financial

(597,050,585) 1,232,620,235 (597,050,585) 1,232,620,235
Institutions

Loans and Advances to Customers (12,590,055,611) (7,050,459,803) (12,587,967,294) (7,050,998,862)

Other Assets (639,113,415) 290,599,104 (640,704,042) 291,661,293

(15,870,113,826) (13,481,486,941) (15,848,534,041) (13,488,015,970)

Increase/(Decrease) in Operating Liabilities

Due to Bank and Financial Institutions (8,035,494,762) 4,379,016,066 (8,035,494,762) 4,379,016,066

Due to Nepal Rastra Bank 103,469,313 (24,676,649,279) 103,469,313 (24,676,649,279)

Deposit from Customers 17,673,782,212 32,150,525,772 17,674,412,334 32,104,026,108

Borrowings (1,348,104,391) 6,289,680,160 (1,348,104,391) 6,289,680,160

Other Liabilities (452,379,435) (1,004,295,084) (456,900,134) (923,855,120)

Net Cash Flow from Operating Activities

(3,814,641,043) 7,888,370,308 (3,866,206,135) 7,871,474,132
Before Tax Paid

Income Taxes Paid (1,625,257,285) (1,486,372,740) (1,600,954,813) (1,455,141,889)

Net Cash Flow from Operating Activities (5,439,898,328) 6,401,997,568 (5,467,160,949) 6,416,332,243

Cash Flows from Investing Activities

Purchase of Investment Securities - (4,281,149,683) - (4,316,902,966)

Receipts from Sale of Investment Securities 15,190,584,798 - 15,201,349,607 -

Purchase of Property and Equipment (376,530,323) (884,747,013) (403,652,805) (879,857,019)

Receipt from the Sale of Property and

- 2,574,664 - 2,574,664
Equipment

Purchase of Intangible Assets (28,829,390) (136,264,340) (28,829,390) (136,264,340)

Receipt from the Sale of Intangible Assets - - - -

Purchase of Investment Properties - - - -

Receipt from the Sale of Investment Properties - - - -

Interest Received 3,381,396,939 3,608,718,975 3,355,359,938 3,566,556,553

Dividend Received 125,116,962 124,667,796 145,575,980 147,805,630

ANNUAL
224 REPORT 2023-24
 GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Net Cash used in Investing Activities 18,291,738,985 (1,566,199,601) 18,269,803,330 (1,616,087,478)

Cash Flows from Financing Activities

Receipt from Issue of Debt Securities - - - -

Repayment of Debt Securities - - - -

Receipt from Issue of Subordinated Liabilities - - - -

Repayment of Subordinated Liabilities - - - -

Receipt from Issue of Shares - - - -

Dividends Paid (618,963,166) (108,172,545) (593,188,166) (82,397,545)

Interest Paid (1,168,318,695) (1,168,318,695) (1,168,318,695) (1,168,318,695)

Other Receipt/Payment - (21,198,093) 30,527,544 (21,198,093)

Net Cash from Financing Activities (1,787,281,861) (1,297,689,333) (1,730,979,317) (1,271,914,333)

Net Increase (Decrease) in Cash and Cash

11,064,558,797 3,538,108,634 11,071,663,066 3,528,330,432
Equivalents

Cash and Cash Equivalents at July 17, 2023 11,571,313,935 7,936,444,278 11,554,080,479 7,928,989,024

Effect of Exchange Rate Fluctuations on Cash

113,985,347 96,761,024 113,985,347 96,761,024
and Cash Equivalents Held

Cash And Cash Equivalents At July 15, 2024 22,749,858,078 11,571,313,935 22,739,728,891 11,554,080,479

PRAMESH SHRESTHA MANOJ KUMAR KEDIA NARENDRA KUMAR AGRAWAL As per our attached report of
HEAD STRATEGY & FINANCE CHAIRMAN RAHUL AGRAWAL even date
DINESH SHANKER PALIKHE
SUNDAR PRASAD KADEL ANKIT KEDIA AMAN UPRETY
CHIEF EXECUTIVE OFFICER MINA KUMARI SAINJU PARTNER
DIRECTORS FOR S.A.R. ASSOCIATES
CHARTERED ACCOUNTANTS
Date: December 06, 2024
Place: Kathmandu, Nepal

ANNUAL 225
REPORT 2023-24
 226
ANNUAL
REPORT 2023-24
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended July 15, 2024 In NPR

GROUP

ATTRIBUTABLE TO EQUITY HOLDERS OF THE BANK

NON-
TOTAL
EXCHANGE CONTROLLING
SHARE GENERAL REGULATORY FAIR VALUE RETAINED OTHER EQUITY
SHARE CAPITAL EQUALISATION REVALUATION TOTAL INTEREST
PREMIUM RESERVE RESERVE RESERVE EARNING RESERVE
RESERVE RESERVE

Balance at July 17, 2022 12,524,426,834 - 3,806,241,487 45,698,341 848,154,757 1,177,672,136 - 1,449,435,636 1,918,195,087 21,769,824,277 214,207,039 21,984,031,315

Adjustment/Restatement - - - - - - - - - - - -

Adjusted/Restated Balance at July

12,524,426,834 - 3,806,241,487 45,698,341 848,154,757 1,177,672,136 - 1,449,435,636 1,918,195,087 21,769,824,277 214,207,039 21,984,031,315
17, 2022
Comprehensive Income for the
Year
Profit for the Year - - - - - - - 3,174,361,596 - 3,198,586,596 30,567,592 3,229,154,188
Other Comprehensive Income, Net
of Tax

Gains/(Losses) From Investments

In Equity Instruments Measured at - - - - - 557,452,547 - - - 557,452,547 638,549 558,091,096
fair value

Gains/(Losses) on Revaluation - - - - - - - - - - - -

Actuarial Gains/(Loss) on Defined

- - - - - - - - 88,753,234 88,753,234 - 88,753,234
Benefit Plans

Gains/(Losses) on Cashflow Hedge - - - - - - - - - - - -

Exchange Gains/(Losses)
(Arising from Translating Financial - - - - - - - - - - - -
Assets of Foreign Operation)

Total Comprehensive Income for

- - - - - 557,452,547 - 3,198,586,596 88,753,234 3,844,792,377 31,206,141 3,875,998,518
the Year

Transfer to Reserve During the Year - - 636,535,794 24,190,256 626,716,716 - - (2,807,194,718) 1,519,751,951 - - -

Transfer From Reserve During the

- - - - (88,753,234) - - 88,753,234 (21,198,093) (21,198,093) - (21,198,093)
Year

Transactions with Owners, Directly

Recognised In Equity

Share Issued - - - - - - - - - - - -

Share Based Payments - - - - - - - - - - - -

Dividends to Equity Holders - - - - - - - - - - - -

 Bonus Shares Issued 1,565,553,357 - - - - - - (1,065,553,357) (500,000,000) - - -

Cash Dividend Paid - - - - - - - (83,672,545) - (107,897,545) (24,500,000) (132,397,545)

Other - - - - - - - - - - - -
Total Contributions by and
1,565,553,357 - - - - - - (1,173,450,902) (107,897,545) (24,500,000) (132,397,545)
Distributions (500,000,000)
Balance at July 16, 2023 14,089,980,191 - 4,442,777,281 69,888,596 1,386,118,241 1,735,124,683 - 756,129,847 3,005,502,179 25,485,521,016 220,913,179 25,706,434,195

Balance at July 17, 2023 14,089,980,191 - 4,442,777,281 69,888,596 1,386,118,241 1,735,124,683 - 756,129,847 3,005,502,179 25,485,521,016 220,913,179 25,706,434,195

Adjustment/Restatement - - - - - - - (218,379,935) - (218,379,935) - (218,379,935)

Adjusted/Restated Balance at July

14,089,980,191 - 4,442,777,281 69,888,596 1,386,118,241 1,735,124,683 - 537,749,912 3,005,502,179 25,267,141,081 220,913,179 25,488,054,260
17, 2023

Comprehensive income for the Year

Profit for the Year - - - - - - - 3,089,707,163 - 3,089,707,163 32,573,931 3,122,281,093

Other Comprehensive income, Net

of Tax

Gains/(Losses) from Investments In

Equity Instruments Measured at Fair - - - - - 488,039,327 - - - 488,039,327 (1,771,458) 486,267,869
Value

Gains/(Losses) on Revaluation - - - - - - - - - - - -

Actuarial Gains/(Loss) On Defined

- - - - - - - - (4,703,213) (4,703,213) - (4,703,213)
Benefit Plans

Gains/(Losses) on Cashflow Hedge - - - - - - - - - - - -

Exchange Gains/(Losses)
(Arising from Translating Financial - - - - - - - - - - - -
Assets of Foreign Operation)

Total Comprehensive income for the

- - - - - 488,039,327 - 3,089,707,163 (4,703,213) 3,573,043,277 30,802,473 3,603,845,749
Year

Transfer to Reserve During the Year - - 624,370,783 28,496,337 254,061,518 - - (2,380,087,671) 1,474,759,032 1,600,000 - 1,600,000

Transfer from Reserve During the Year - - - - - (17,411,446) - 24,873,494 - 7,462,048 - 7,462,048

Transactions with Owners, Directly

Recognised In Equity

Share Issued - - - - - - - - - - - -

Share Based Payments - - - - - - - - - - - -

Dividends to Equity Holders - - - - - - - - - - - -

Bonus Shares Issued - - - - - - - - - - - -

Cash Dividend Paid - - - - - - - (594,463,166) - (594,463,166) (24,500,000) (618,963,166)

Other - - - - - - - - - - - -

Total Contributions by and

- - - - - - - (594,463,166) - (594,463,166) (24,500,000) (618,963,166)
Distributions

Balance at July 15, 2024 14,089,980,191 - 5,067,148,065 98,384,933 1,640,179,760 2,205,752,565 - 677,779,732 4,475,557,998 28,254,783,239 227,215,654 28,481,998,892

REPORT 2023-24
227ANNUAL
 228
ANNUAL
REPORT 2023-24
BANK

ATTRIBUTABLE TO EQUITY HOLDERS OF THE BANK

NON-
EXCHANGE CONTROLLING TOTAL EQUITY
SHARE GENERAL REGULATORY FAIR VALUE REVALUATION RETAINED
SHARE CAPITAL EQUALISATION OTHER RESERVE TOTAL INTEREST
PREMIUM RESERVE RESERVE RESERVE RESERVE EARNING
RESERVE

Balance At July 17, 2022 12,524,426,833 - 3,775,841,483 45,698,341 848,154,757 1,177,672,136 - 1,359,868,481 1,866,212,062 21,597,874,092 - 21,597,874,092

Adjustment/Restatement - - - - - - - - - - - -

Adjusted/Restated Balance at July

12,524,426,833 - 3,775,841,483 45,698,341 848,154,757 1,177,672,136 - 1,359,868,481 1,866,212,062 21,597,874,092 - 21,597,874,092
17, 2022

Comprehensive Income for the Year

Profit for the Year - - - - - - - 3,166,771,347 - 3,166,771,347 - 3,166,771,347

Other Comprehensive Income, Net

of Tax

Gains/(Losses) from Investments in

Equity Instruments Measured At Fair - - - - - 556,787,935 - - - 556,787,935 - 556,787,935
Value

Gains/(Losses) on Revaluation - - - - - - - - - - - -

Actuarial Gains/(Loss) on Defined

- - - - - - - - 88,753,234 88,753,234 - 88,753,234
Benefit Plans

Gains/(Losses) on Cashflow Hedge - - - - - - - - - - - -

Exchange Gains/(Losses)
(Arising from Translating Financial - - - - - - - - - - - -
Assets of Foreign Operation)

Total Comprehensive Income for the

- - - - - 556,787,935 - 3,166,771,347 88,753,234 3,812,312,516 - 3,812,312,516
Year

Transfer to Reserve During the Year - - 633,354,269 24,190,256 626,716,716 - - (2,803,831,723) 1,519,570,481 - - -

Transfer from Reserve During the Year - - - - (88,753,234) - - 88,753,234 (21,198,093) (21,198,093) - (21,198,093)

Transactions with Owners, Directly

Recognised in Equity

Share Issued - - - - - - - - - - - -

Share Based Payments - - - - - - - - - - - -

Dividends to Equity Holders - - - - - - - - - - - -

Bonus Shares Issued 1,565,553,357 - - - - - - (1,065,553,357) (500,000,000) - - -

Cash Dividend Paid - - - - - - - (82,397,545) - (82,397,545) - (82,397,545)

Other - - - - - - - - - - - -

Total Contributions by and

1,565,553,357 - - - - - - (1,147,950,902) (500,000,000) (82,397,545) - (82,397,545)
Distributions

Balance At July 16, 2023 14,089,980,189 - 4,409,195,752 69,888,596 1,386,118,241 1,734,460,071 - 663,610,437 2,953,337,683 25,306,590,970 - 25,306,590,969
 Balance At July 17, 2023 14,089,980,189 - 4,409,195,752 69,888,596 1,386,118,241 1,734,460,071 - 663,610,437 2,953,337,683 25,306,590,970 - 25,306,590,970

Adjustment/Restatement* - - - - - - - (218,379,935) - (218,379,935) - (218,379,935)

Adjusted/Restated Balance at July
14,089,980,189 - 4,409,195,752 69,888,596 1,386,118,241 1,734,460,071 - 445,230,502 2,953,337,683 25,088,211,035 - 25,088,211,035
17, 2023

Comprehensive Income for the Year

Profit for the Year - - - - - - - 3,080,028,684 - 3,080,028,684 - 3,080,028,684

Other Comprehensive Income, Net

Of Tax
Gains/(Losses) from Investments in
Equity Instruments Measured at Fair - - - - - 489,883,090 - - - 489,883,090 - 489,883,090
Value

Gains/(Losses) on Revaluation - - - - - - - - - - - -

Actuarial Gains/(Loss) on Defined

- - - - - - - - (4,703,213) (4,703,213) - (4,703,213)
Benefit Plans

Gains/(Losses) on Cashflow Hedge - - - - - - - - - - - -

Exchange Gains/(Losses)
(Arising from Translating Financial - - - - - - - - - - - -
Assets of Foreign Operation)

Total Comprehensive Income for the

- - - - - 489,883,090 - 3,080,028,684 (4,703,213) 3,565,208,560 - 3,565,208,560
Year

Transfer to Reserve During the Year - - 620,980,435 28,496,337 254,061,518 - - (2,376,582,898) 1,474,644,607 1,600,000 - 1,600,000

Transfer from Reserve During the Year - - - - - (17,411,446) - 24,873,494 - 7,462,048 - 7,462,048

Transactions with Owners, Directly

Recognised in Equity

Share Issued - - - - - - - - - - - -

Share Based Payments - - - - - - - - - - - -

Dividends to Equity Holders - - - - - - - - - - - -

Bonus Shares Issued - - - - - - - - - - - -

Cash Dividend Paid - - - - - - - (593,188,166) - (593,188,166) - (593,188,166)

Other - - - - - - - - - - - -

Total Contributions by and

- - - - - - - (593,188,166) - (593,188,166) - (593,188,166)
Distributions

Balance At July 15, 2024 14,089,980,188 - 5,030,176,188 98,384,933 1,640,179,760 2,206,931,715 - 580,361,617 4,423,279,078 28,069,293,477 - 28,069,293,474

*The Bank has deposited NPR 218,379,935 in accordance with the provision of section 27 of Finance Act, 2080 related to income tax liability arising from bargain purchase gain from merger of the entities and share premium collected from auction of right
shares. The deposited amount has been adjusted in opening retained earnings.

REPORT 2023-24
229ANNUAL
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 15 JULY 2024

1. REPORTING ENTITY
GENERAL
Siddhartha Bank Limited (SBL or the Bank) is a limited liability publicly listed company established in 2002 in Nepal. The
registered office of the Bank is situated at Naxal, Kathmandu, Nepal. The Bank carries out commercial banking activities and
other financial services in Nepal under the license from Nepal Rastra Bank (NRB), the Central Bank of Nepal, as “Ka Class” (Class
A) licensed financial institution. The Bank is listed on Nepal Stock Exchange.

FINANCIAL STATEMENTS
The Financial Statements of the Bank for the year ended on July 15, 2024 comprises Statement of Financial Position, Statement
of Profit or Loss, Statement of Other Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows and
Notes to the Financial Statements.

PRINCIPAL ACTIVITIES AND OPERATIONS

BANK
The principal activities of the Bank are to provide full-fledged banking services including treasury, trade finance services,
remittance, digital payment services and e-commerce products/ services to its customers through its business centers,
branches, extension counters, branchless banking, ATMs and network of agents.

OWNERSHIP OF SUBSIDIARY AS AT JULY 15, 2024

SUBSIDIARY PRINCIPAL ACTIVITIES 15 JULY 2024 16 JULY 2023

Management of public offerings, portfolio

Siddhartha Capital Limited management, underwriting of securities, 51% holding 51% holding
management of mutual fund schemes

SUBSIDIARY
The principal activities of the Subsidiary are to provide merchant/investment banking services that include management of
public offerings, portfolio management, underwriting of securities, and fund management of mutual fund schemes, depository
participant’s service under Central Depository Service (CDS) and administration and record keeping of securities of its clients.

2. BASIS OF PREPARATION
STATEMENT OF COMPLIANCE
The Financial Statements of the Bank which comprises components mentioned above have been prepared on a going
concern basis and in accordance with Nepal Financial Reporting Standards published by Accounting Standards Board, Nepal
and pronounced by Institute of Chartered Accountants of Nepal and in the format prescribed by NRB directive, issued by
Nepal Rastra Bank (Central Bank of Nepal).

REPORTING PERIOD AND APPROVAL OF FINANCIAL STATEMENTS

REPORTING PERIOD
The Bank follows the Nepalese financial year based on the Nepalese calendar. The corresponding dates for the English
calendar are as follows:

RELEVANT FINANCIAL STATEMENT NEPALESE CALENDAR DATE/PERIOD ENGLISH CALENDAR DATE/PERIOD

Statement of Financial Position 31 Ashad,2081 15 July 2024
Statement of Profit or Loss 01 Shrawan, 2080 to 31 Ashad, 2081 17 July 2023 to 15 July 2024
Statement of Other Comprehensive Income 01 Shrawan, 2080 to 31 Ashad, 2081 17 July 2023 to 15 July 2024
Statement of Cash flows 31 Ashad, 2081 15 July 2024

Statement of changes in Equity 01 Shrawan, 2080 to 31 Ashad, 2081 17 July 2023 to 15 July 2024

ANNUAL
230 REPORT 2023-24
RESPONSIBILITY FOR FINANCIAL STATEMENTS These estimates are based on assumptions about a number
The Board of Directors is responsible for the preparation and of factors and actual results may differ, resulting in future
presentation of Financial Statements. changes to the impairment allowance.

APPROVAL OF FINANCIAL STATEMENTS BY DIRECTORS Loans and advances that have been assessed individually
The Financial Statements have been authorized by the Board and found to be not impaired and all individually insignificant
of Directors in its meeting held on December 06, 2024 and loans and advances are then assessed collectively, in groups
have recommended for its approval in the Annual General of assets with similar risk characteristics, to determine
Meeting of the shareholders. whether provision should be made due to incurred loss
events for which there is objective evidence, but the effects
FUNCTIONAL AND PRESENTATION CURRENCY of which are not yet evident. The collective assessment takes
The Financial Statements of the Bank are presented in in to account data from the loan portfolio such as levels of
Nepalese Rupees (NPR), which is the currency of the primary arrears, credit quality, portfolio size etc. and judgments based
economic environment in which the Bank operates. Financial on current economic conditions.
information are presented in Nepalese Rupees and has been
shown in actual figure, unless otherwise stated. 2.4.4 IMPAIRMENT OF FINANCIAL ASSETS
AT FAIR VALUE THROUGH OCI
The Bank reviews its debt securities classified as financial
USE OF ESTIMATES, ASSUMPTIONS AND JUDGMENTS
assets at fair value through OCI, at each reporting date to
The preparation of Financial Statements in conformity
assess whether they are impaired. Objective evidence that
with Nepal Financial Reporting Standards (NFRS) requires
a debt security that has been classified as financial assets
the management to make judgments, estimates and
at fair value through OCI is impaired includes among other
assumptions that affect the application of accounting
things significant financial difficulty of the issuer, a breach
policies and the reported amounts of assets, liabilities,
of contract such as a default or delinquency in interest or
income and expenses. Actual results may differ from these
principal payments etc. The Bank also records impairment
estimates.
charges on equity investments classified as financial
assets at fair value through OCI where there is significant
Estimates and underlying assumptions are reviewed on
or prolonged decline in fair value below their cost. The
an ongoing basis. Revisions to accounting estimates are
determination of what is ‘significant’ or ‘prolonged’ requires
recognized in the period in which the estimate is revised and
judgment.
in any future periods affected.

The most significant areas of estimation, uncertainty and 2.4.5 TAXATION

critical judgments in applying accounting policies that have The Bank is subject to income tax and judgment is required
most significant effect in the Financial Statements are as to determine the total provision for current, deferred and
follows: other taxes due to the uncertainties that exist with respect
to the interpretation of the applicable tax laws, at the time of
preparation of these Financial Statements.
GOING CONCERN
The Board of Directors have made an assessment of the
Deferred tax assets are recognized in respect of tax losses
Bank’s ability to continue as a going concern and are
to the extent that it is probable that future taxable profit
satisfied that it has the resources to continue in business for
will be available against which the losses can be utilized.
the foreseeable future. Furthermore, the Board is not aware
Judgment is required to determine the amount of deferred
of any material uncertainties that may cast significant doubt
tax assets that can be recognized, based upon the likely
upon Bank’s ability to continue as a going concern and they
timing and level of future taxable profits, together with future
do not intend either to liquidate or to cease operations of it.
tax planning strategies.
Therefore, the Financial Statements continue to be prepared
on the going concern basis.
2.4.6 DEFINED BENEFIT PLANS
The cost of the defined benefit obligations and the present
FAIR VALUE OF FINANCIAL INSTRUMENTS
value of their obligations are determined using actuarial
Where the fair values of financial assets and financial
valuations.
liabilities recorded in the statement of financial position
can be derived from active markets, they are derived from
The actuarial valuation involves making assumptions about
observable market data. However, if this is not available,
discount rates, future salary increments, mortality rates and
judgment is required to establish fair values. The valuation of
possible future pension increments if any. Due to the long
financial instruments is described in more detail in Note 3.4.
term nature of these plans, such estimates are subject to
uncertainty. All assumptions are reviewed at each reporting
IMPAIRMENT OF FINANCIAL ASSETS – LOANS AND ADVANCES
date.
The Bank reviews its individually significant loans and
advances at each statement of financial position date to
In determining the appropriate discount rate, management
assess whether an impairment loss should be recorded
considers the interest rates of Nepal government bonds
in the income statement. In particular, judgment of the
with maturities corresponding to the expected duration of
management is required in the estimation of the amount
the defined benefit obligation. The mortality rate is based on
and timing of future cash flows when determining the
publicly available mortality tables. Future salary increment
impairment loss.
and pension increment are based on expected future salary
increment rates of the Bank.
ANNUAL 231
REPORT 2023-24
 2.4.7 FAIR VALUE OF PROPERTY, PLANT AND EQUIPMENT lowers the threshold for recognition of full life time expected
The freehold land and buildings of the Bank are presented losses by aligning financial accounting treatment with risk
at cost. Since the property, plant and equipment are not management activities.
reflected at fair value, no revaluation has been carried at the
reporting date. IFRS 9 has become effective from 1 January 2018. However, in
NFRS-09, impairment calculation model similar to NAS-39 has
2.4.8 USEFUL LIFE-TIME OF THE PROPERTY, been retained via carve-outs. If NFRS-09 is revised to replace
PLANT AND EQUIPMENT existing incurred loss model with expected credit loss model,
The Bank is following the cost model for recognition of it will have an effect on impairment calculation of the Bank’s
Property, Plant and Equipment. The Bank reviews the residual financial assets.
values, useful lives and methods of depreciation of property,
plant and equipment at each reporting date. Judgment of B) IFRS 15- REVENUE FROM CONTRACTS WITH CUSTOMERS
the management is exercised in the estimation of these IFRS 15 replaces IAS 18 Revenue and IAS 11 Construction
values, rates, methods and hence they are subject to Contracts. Financial instruments, leases and insurance
uncertainty. contracts are out of scope and so this Standard is not
expected to have a significant impact on the Bank.
2.4.9 COMMITMENTS AND CONTINGENCIES
All discernible risks are accounted for in determining the 2.7 NEW STANDARDS AND INTERPRETATION
amount of all known liabilities. Contingent liabilities are NOT ADOPTED
possible obligations whose existence will be confirmed only The financial statements of the Bank have been prepared
by uncertain future events or present obligations where the in accordance with Nepal Financial Reporting Standards
transfer of economic benefit is not probable or cannot be (NFRS) to the extent applicable and as issued by Accounting
reliably measured. Contingent liabilities are not recognized in Standards Board-Nepal.
the Statement of Financial Position but are disclosed unless
they are remote.
2.8 DISCOUNTING
When the realization of assets and settlement of obligation is
2.4.10 CLASSIFICATION OF INVESTMENT PROPERTIES for more than one year, the Bank considers the discounting
Management requires using its judgment to determine of such assets and liabilities where the impact is material.
whether a property qualifies as an investment property. The Various internal and external factors have been considered
Bank has developed criteria so it can exercise its judgment for determining the discount rate to be applied to the cash
consistently. A property that is held to earn rentals or for flows of company.
capital appreciation or both and which generates cash
flows largely independently of the other assets held by the The Bank has a policy to treat share/debenture issue
Bank is accounted for as investment properties. On the other expenses up to 1% of share/debentures issue price as
hand, a property that is used for operations or in the process immaterial thus the same has not been considered in
of providing services or for administrative purposes and computation of fair value of share/debenture.
which do not directly generate cash flows as a standalone Discount rate for the valuation of employee benefits viz.
assets are accounted for as property, plant and equipment. gratuity and leave encashment is based on Yield to Maturity
The Bank assesses on an annual basis the accounting (YTM) available on government bonds having similar term to
classification of its properties taking into consideration the decrement-adjusted estimated term of liabilities.
current use of such properties.

2.5 CHANGES IN ACCOUNTING POLICIES

3. SIGNIFICANT ACCOUNTING POLICIES
The Bank applies its accounting policies consistently. There
The accounting policies set out below have been applied
are no changes in accounting policies and methods of
consistently to all periods presented in these Financial
computation since the publication of annual financial
Statements, unless otherwise indicated.
statements for the year ended on July 16, 2023, unless
otherwise disclosed.
3.1 BASIS OF MEASUREMENT
The Financial Statements of the Bank have been prepared
2.6 NEW STANDARDS IN ISSUE BUT NOT YET EFFECTIVE
on the historical cost basis, except for the following material
There have been amendment to the Standards issued by
items in the Statement of Financial Position:
IASB and applicability of the new Standards have been
notified for IFRS. But, the amendments and new standards
 Financial assets at fair value.
become applicable only when ASB-Nepal pronounces
them. The new Standards issued but not yet effective up  Liabilities for defined benefit obligations are recognized at
to the date of issuance of the financial statements are set the present value of the defined benefit obligation less the
out below. The Bank will adopt these standards when they fair value of the plan assets.
become effective.
 Financial assets and financial liabilities held at
A) IFRS 9- FINANCIAL INSTRUMENTS amortized cost are measured using a rate that is a close
IFRS 9 recommends the assessment of impairment based approximation of effective interest rate.
on more timely recognition of expected credit losses and
entities are required to account for expected credit losses
from the initial recognition of financial instruments and it

ANNUAL
232 REPORT 2023-24
3.2 BASIS OF CONSOLIDATION The acquired identifiable assets, liabilities are measured
at their cost at the date of acquisition. After the initial
A. BUSINESS COMBINATIONS AND GOODWILL measurement, the Bank continues to recognize the
Business combinations are accounted for using the investments in subsidiaries at cost.
acquisition method as per the requirements of Nepal
Financial Reporting Standard - NFRS 03 (Business The subsidiary of the Bank viz. Siddhartha Capital Limited has
Combinations). The Bank measures goodwill as the fair value been incorporated in Nepal.
of the consideration transferred including the recognized
amount of any non-controlling interest in the acquiree, D. LOSS OF CONTROL
less the net recognized amount (generally fair value) of When the Bank loses control over a Subsidiary, it
the identifiable assets acquired and liabilities assumed, all derecognizes the assets and liabilities of the former
measured as of the acquisition date. When the excess is subsidiary from the consolidated statement of financial
negative, a bargain purchase gain is immediately recognized position. The Bank recognizes any investment retained in the
in the profit or loss. former subsidiary at its fair value when control is lost and
subsequently accounts for it and for any amounts owed by
The Bank elects on a transaction-by transaction basis or to the former subsidiary in accordance with relevant NFRSs.
whether to measure non-controlling interest at its fair value, That fair value shall be regarded as the fair value on initial
or at its proportionate share of the recognized amount recognition of a financial asset in accordance with relevant
of the identifiable net assets, at the acquisition date. The NFRS or, when appropriate, the cost on initial recognition
consideration transferred does not include amounts related of an investment in an associate or joint venture. The Bank
to the settlement of pre-existing relationships. Such amounts recognizes the gain or loss associated with the loss of control
are generally recognized in profit or loss. Transactions costs, attributable to the former controlling interest.
other than those associated with the issue of debt or equity
securities, that the Bank incurs in connection with a business
E. SPECIAL PURPOSE ENTITY (SPE)
combination are expensed as incurred.
An entity may be created to accomplish a narrow and
well-defined objective (e.g. to effect a lease, research and
B. NON-CONTROLLING INTEREST (NCI) development activities or a securitization of financial assets).
The group presents non-controlling interests in its Such a special purpose entity (‘SPE’) may take the form of a
consolidated statement of financial position within equity, corporation, trust, partnership or unincorporated entity. SPEs
separately from the equity of the owners of the parent. The often are created with legal arrangements that impose strict
group attributes the profit or loss and each component of and sometimes permanent limits on the decision-making
other comprehensive income to the owners of the parent powers of their governing board, trustee or management
and to the non-controlling interests. The proportion allocated over the operations of the SPE. Examples of SPEs include
to the Siddhartha Bank and non-controlling interests are entities set up to effect a lease, a securitization of financial
determined on the basis of present ownership interests. assets, or R&D activities. Nepal Financial Reporting Standard
The group also attributes total comprehensive income to the 10 - Consolidated Financial Statement is applicable in relation
owners of the Bank and to the non-controlling interests even to consolidation of special purpose entity.
if this results in the non-controlling interests having a deficit
balance. The Bank does not have any special purpose entity.

C. SUBSIDIARIES F. TRANSACTION ELIMINATION ON CONSOLIDATION

Subsidiaries are entities that are controlled by the Bank. The In consolidating a subsidiary, the group eliminates full intra-
Bank is presumed to control an investee when it is exposed group assets and liabilities, equity, income, expenses and
or has rights to variable returns from its involvement with the cash flows relating to transactions between the subsidiary
investee and has the ability to affect those returns through and the Bank (profits or losses resulting from intra-group
its power over the investee. At each reporting date the transactions that are recognized in assets, such as inventory
Bank reassesses whether it controls an investee if facts and and fixed assets, are eliminated in full).
circumstances indicate that there are changes to one or
more elements of control mentioned above. 3.3 CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents include cash in hand, balances
The Financial Statements of Subsidiaries are fully with banks and money at call and at short notice. These
consolidated from the date on which control is transferred are subject to insignificant risk of changes in their fair value
to the Bank and continue to be consolidated until the date and are used by the Bank in the management of short term
when such control ceases. The Financial Statements of the commitments.
Bank’s Subsidiaries are prepared for the same reporting year Details of the Cash and Cash Equivalents are given in Note 4.1
as per the Bank, using consistent accounting policies. to the Financial Statements.

ANNUAL 233
REPORT 2023-24
 3.4 FINANCIAL ASSETS AND FINANCIAL LIABILITIES fair value are recognized in ‘Net trading income’. Dividend
income is recorded in ‘Net trading income’ when the
INITIAL RECOGNITION dividend is realized.

a. Date of Recognition Bank evaluates its held for trading asset portfolio, other than
All financial assets and liabilities are initially recognized on derivatives, to determine whether the intention to sell them
the trade date, i.e. the date on which the Bank becomes a in the near future is still appropriate. When Bank is unable
party to the contractual provisions of the instrument. This to trade these financial assets due to inactive markets and
includes ‘regular way trades’. Regular way trade means management’s intention to sell them in the foreseeable
purchases or sales of financial assets that required delivery future significantly changes, the Bank may elect to reclassify
of assets within the time frame generally established by these financial assets. Financial assets held for trading
regulation or convention in the market place. include instruments such as government securities and
equity instruments that have been acquired principally for
b. Recognition and Initial Measurement of Financial the purpose of selling or repurchasing in the near term.
Instruments
The classification of financial instruments at the initial (A) (II) FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH
recognition depends on their purpose and characteristics PROFIT OR LOSS
and the management’s intention in acquiring them. All Bank designates financial assets at fair value through profit
financial instruments are measured initially at their fair or loss in the following circumstances:
value plus transaction costs that are directly attributable to
acquisition or issue of such financial instruments except in  Such designation eliminates or significantly reduces
the case of such financial assets and liabilities at fair value measurement or recognition inconsistency that would
through profit or loss, as per NFRS-9. Transaction costs in otherwise arise from measuring the assets.
relation to financial assets and financial liabilities at fair
 The assets are part of a group of Financial assets,
value through profit or loss are dealt with the Statement of
financial liabilities or both, which are managed and
Profit or Loss.
their performance evaluated on a fair value basis, in
accordance with a documented risk management or
CLASSIFICATION AND SUBSEQUENT MEASUREMENT investment strategy.
OF FINANCIAL INSTRUMENTS
CLASSIFICATION AND SUBSEQUENT MEASUREMENT OF FINANCIAL  The assets contain one or more embedded derivatives
ASSETS that significantly modify the cash flows that would
otherwise have been required under the contract.
At the inception, a financial asset is classified into one of the
following: Financial assets designated at fair value through profit or
loss are recorded in the Statement of Financial Position at
(a) Financial assets at fair value through profit or loss fair value. Changes in fair value are recorded in ‘Net gain
or loss on financial instruments designated at fair value
i. Financial assets held for trading
through profit or losses’ in the Statement of Profit or Loss.
ii. Financial assets designated at fair value through Interest earned is accrued under ‘Interest income’, using
profit or loss the effective interest rate method, while dividend income
is recorded under ‘Net trading income’ when the right to
(b) Financial assets at fair value through OCI receive the payment has been established.
The subsequent measurement of financial assets depends The Bank has not designated any financial assets upon initial
on their classification. recognition as designated at fair value through profit or loss.

(A) FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (B) FINANCIAL ASSETS AT AMORTIZED COST
A financial asset is classified as fair value through profit Financial assets at amortized cost are non-derivative
or loss if it is held for trading or is designated at fair value financial assets with fixed or determinable payments and
through profit or loss. fixed maturities which the Bank has the intention and ability
to hold to maturity. After the initial measurement, financial
(A) (I) FINANCIAL ASSETS HELD FOR TRADING assets at amortized cost are subsequently measured
Financial assets are classified as held for trading if they at amortized cost using the effective interest rate, less
are acquired principally for the purpose of selling or impairment. The amortization is included in ‘Interest income’
repurchasing in the near term or holds as a part of a in the Statement of Profit or Loss. The losses arising from
portfolio that is managed together for short-term profit impairment of such investments are recognized in the
or position taking. This category also includes derivative Statement of Profit or Loss.
financial instruments entered into by Bank that are not
designated as hedging instruments in hedge relationships. LOANS AND ADVANCES FROM CUSTOMERS
Loans and receivables include non-derivative financial
Financial assets held for trading are recorded in the assets with fixed or determinable payments that are not
Statement of Financial Position at fair value. Changes in quoted in an active market, other than:

ANNUAL
234 REPORT 2023-24
 Those that the Bank intends to sell immediately or in the certain circumstances, however, the fair value will be based
near term and those that the Bank, upon initial recognition, on other observable current market transactions in the
designates as fair value through profit or loss. same instrument, without modification or repackaging, or
on a valuation technique whose variables include only data
 Those that the Bank, upon initial recognition, designates as from observable markets, such as interest rate yield, option
financial assets at fair value through OCI volatilities and currency rates. When such evidence exists,
the Bank recognizes a trading gain or loss on inception of
 Those for which the Bank may not recover substantially
the financial instrument, being the difference between the
all of its initial investment through contractual cash flows,
transaction price and fair value.
other than because of credit deterioration.

When unobservable market data have a significant

Loans and Advances mainly represent loans and advances
impact on the valuation of financial instruments, the entire
to customers, Banking and Financial Institutions. After initial
initial difference in fair value from the transaction price
measurement, loans and receivables are subsequently
as indicated by the valuation model is not recognized
measured at amortized cost using a rate that closely
immediately in the income statement. Instead, it is
approximates effective interest rate, less allowance for
recognized over the life of the transaction on an appropriate
impairment. Within this category, loans and advances to the
basis, when the inputs become observable, the transaction
customers have been recognized at amortized cost using
matures or is closed out, or when the Bank enters into an
the method that very closely approximates effective interest
offsetting transaction.
rate method. The amortization is included in ‘Interest Income’
in the Statement of Profit or Loss. The losses arising from
impairment are recognized in ‘Impairment charge/reversal CLASSIFICATION AND SUBSEQUENT MEASUREMENT OF FINANCIAL
LIABILITIES
for loans and other losses’ in the Statement of Profit or Loss.
At the inception, Bank determines the classification of
its financial liabilities. Accordingly financial liabilities are
(C) FINANCIAL ASSETS AT FAIR VALUE THROUGH OCI classified as:
Financial assets at fair value through OCI include equity and a. Financial liabilities at fair value through profit or loss
debt securities. Equity Investments classified as ‘Financial
assets at fair value through OCI’ are those which are neither i) Financial liabilities held for trading
classified as ‘Held for Trading’ nor ‘Designated at fair value
through profit or loss’. Debt securities in this category are ii) inancial liabilities designated at fair value through profit
intended to be held for an indefinite period of time and may or loss
be sold in response to need for liquidity or in response to b. Financial liabilities at amortized cost
changes in the market conditions.
(A) FINANCIAL LIABILITIES AT FAIR VALUE THROUGH
After initial measurement, financial assets at fair value PROFIT OR LOSS
through OCI are subsequently measured at fair value. Financial Liabilities at fair value through profit or loss include
Unrealized gains and losses are recognized directly in equity financial liabilities held for trading and financial liabilities
through ‘Other comprehensive income / expense’ in the ‘Fair designated upon initial recognition as fair value through
value reserve’. Where Bank holds more than one investment profit or loss. Subsequent to initial recognition, financial
in the same security, they are deemed to be disposed of liabilities at fair value through profit or loss are measured at
on a first-in-first-out basis. Interest earned whilst holding fair value and changes therein are recognized in profit or loss.
financial assets at fair value through OCI is reported as
‘Interest income’ using the effective interest rate. Dividend (I) FINANCIAL LIABILITIES HELD FOR TRADING
earned whilst holding financial assets at fair value through Financial liabilities are classified as held for trading if
OCI are recognized in the Statement of Profit or Loss as ‘other they are acquired principally for the purpose of selling or
operating income’ when the right to receive the payment has repurchasing in the near term or holds as a part of a portfolio
been established. The losses arising from impairment of such that is managed together for short-term profit or position
investments are recognized in the Statement of Profit or Loss taking. This category includes derivative financial instrument
under ‘Impairment charge for loans and other losses’ and entered into by Bank that are not designated as hedging
removed from the ‘Fair value reserve’. instruments in hedge relationships.

Financial assets at fair value through OCI that are monetary

(II) FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE
securities denominated in a foreign currency – translation THROUGH PROFIT OR LOSS
differences related to changes in the amortized cost of Bank designates financial liabilities at fair value through profit
the security and other changes in the carrying amount are or loss at following circumstances:
recognized in other comprehensive income.
 Such designation eliminates or significantly reduces
In the normal course of business, the fair value of a financial measurement or recognition inconsistency that would
instrument on initial recognition is the transaction price (that otherwise arise from measuring the liabilities.
is, the fair value of the consideration given or received). In
 The liabilities are part of a group of Financial assets,

ANNUAL 235
REPORT 2023-24
 financial liabilities or both, which are managed and loss already recognized in respect of the reclassified financial
their performance evaluated on a fair value basis, in instrument until the date of reclassification is not reversed to
accordance with a documented risk management or the Statement of Profit or Loss.
investment strategy
If a financial asset is reclassified, and if Bank subsequently
 The liability contains one or more embedded derivatives increases its estimates of the future cash receipts as a
that significantly modify the cash flows that would result of increased recoverability of those cash receipts,
otherwise have been required under the contract. the effect of that increase is recognized as an adjustment
to the effective interest rate from the date of the change in
(B) FINANCIAL LIABILITIES AT AMORTIZED COST estimate rather than an adjustment to the carrying amount
Financial instruments issued by Bank that are not classified of the asset at the date of change in estimate.
as fair value through profit or loss are classified as financial
liabilities at amortized cost, where the substance of the 3.4.3. (b) RECLASSIFICATION OF ‘FINANCIAL
contractual arrangement results in Bank having an obligation ASSETS AT FAIR VALUE THROUGH OCI’
either to deliver cash or another financial asset to another Bank may reclassify financial assets out of financial assets
Bank, or to exchange financial assets or financial liabilities at fair value through OCI category as a result of change in
with another Bank under conditions that are potentially intention or ability or in rare circumstances that a reliable
unfavorable to the Bank or settling the obligation by measure of fair value is no longer available.
delivering variable number of Bank’s own equity instruments.
A financial asset classified as financial assets at fair value
The share/debenture issue expenses up to 1% of total amount through OCI that would have met the definition of loans and
of share/debenture being issued shall be expensed off in the receivables at the initial recognition may be reclassified out
year of issue of such share/debenture. After initial recognition, of financial assets at fair value through OCI category to the
such financial liabilities are subsequently measured at loans and receivables category if Bank has the intention and
amortized cost using the effective interest rate method. ability to hold such asset for the foreseeable future or until
Within this category, deposits and debt instruments with fixed maturity.
maturity period have been recognized at amortized cost
using the method that very closely approximates effective
The fair value of financial instruments at the date of
interest rate method. The amortization is included in ‘Interest
reclassification is treated as the new cost or amortized
Expenses’ in the Statement of Profit or Loss. Gains and losses
cost of the financial instrument after reclassification.
are recognized in the Statement of Profit or Loss when the
Difference between the new amortized cost and the
liabilities are derecognized.
maturity value is amortized over the remaining life of the
asset using the effective interest rate. Any gain or loss
RECLASSIFICATION OF FINANCIAL INSTRUMENTS
already recognized in Other Comprehensive Income
in respect of the reclassified financial instrument is
3.4.3. (a) RECLASSIFICATION OF FINANCIAL INSTRUMENTS accounted as follows:
‘AT FAIR VALUE THROUGH PROFIT OR LOSS’,
Bank does not reclassify derivative financial instruments out
of the fair value through profit or loss category when it is held (I) FINANCIAL ASSETS WITH FIXED MATURITY
or issued. Gain or loss recognized up to the date of reclassification
is amortized to profit or loss over the remaining life of the
Non-derivative financial instruments designated at fair investment using the effective interest rate. If the financial
value through profit or loss upon initial recognition are not asset is subsequently impaired, any previous gain or loss
reclassified subsequently out of fair value through profit or that has been recognized in other comprehensive income
loss category. is reclassified from equity to profit or loss.

Bank may, in rare circumstances reclassify financial (B) FINANCIAL ASSETS WITHOUT FIXED MATURITY
instruments out of fair value through profit or loss category Gain or loss recognized up to the date of reclassification
if such instruments are no longer held for the purpose of is recognized in profit or loss only when the financial asset
selling or repurchasing in the near term notwithstanding is sold or otherwise disposed of. If the financial asset
that such financial instruments may have been acquired is subsequently impaired, any previous gain or loss that
principally for the purpose of selling or repurchasing in the has been recognized in other comprehensive income is
near term. Financial assets classified as fair value through reclassified from equity to profit or loss.
profit or loss at the initial recognition which would have
also met the definition of ‘Loans and Receivables’ as at that If a financial asset is reclassified, and if Bank subsequently
date is reclassified out of the fair value through profit or loss increases its estimates of future cash receipts as a result of
category only if Bank has the intention and ability to hold increased recoverability of those cash receipts, the effect of
such asset for the foreseeable future or until maturity. that increase is recognized as an adjustment to the effective
interest rate from the date of the change in estimate rather
The fair value of financial instruments at the date of than an adjustment to the carrying amount of the asset at
reclassification is treated as the new cost or amortized cost the date of change in estimate.
of the financial instrument after reclassification. Any gain or

ANNUAL
236 REPORT 2023-24
3.4.3. (C) RECLASSIFICATION OF FINANCIAL The difference between the carrying value of the original
ASSETS AT AMORTIZED COST financial liability and the consideration paid is recognized in
As a result of a change in intention or ability, if it is no longer profit or loss.
appropriate to classify an investment as financial assets at
amortized cost, Bank may reclassify such financial assets as
3.4.4 (C) REPURCHASE AND REVERSE REPURCHASE AGREEMENTS
financial assets at fair value through OCI and re-measure
Securities sold under agreement to repurchase at a
them at fair value. Any difference between the carrying value
specified future date are not de-recognized from the
of the financial asset before reclassification and fair value is
Statement of Financial Position as the Bank retains
recognized in equity through other comprehensive income.
substantially all of the risks and rewards of ownership. The
corresponding cash received is recognized in the Statement
DE-RECOGNITION OF FINANCIAL ASSETS AND LIABILITIES of Financial Position as a liability with a corresponding
3.4.4. (A) DE-RECOGNITION OF FINANCIAL ASSETS obligation to return it, including accrued interest under
Bank derecognizes a financial asset (or where applicable a ‘Securities sold under repurchase agreements’, reflecting
part of financial asset or part of a group of similar financial the transaction’s economic substance to the Bank. The
assets) when: difference between the sale and repurchase prices is
treated as interest expense and is accrued over the life of
 The rights to receive cash flows from the asset have the agreement using the effective interest rate. When the
expired; or Bank has the right to sell or re-pledge the securities, the
Bank reclassifies those securities in its Statement of Financial
 Bank has transferred its rights to receive cash flows from Position as ‘Financial assets held for trading’ pledged as
the asset or collateral or ‘Financial assets at fair value through OCI’
pledged as collateral, as appropriate.
 Bank has assumed an obligation to pay the received
cash flows in full without material delay to a third party
Conversely, securities purchased under agreements to
under a ‘pass-through’ arrangement and either Bank
resell at future date are not recognized in the Statement
has transferred substantially all the risks and rewards
of Financial Position. The consideration paid, including
of the asset or it has neither transferred nor retained
accrued interest, is recorded in the Statement of Financial
substantially all the risks and rewards of the asset, but has
Position, under “Reverse repurchase agreements’ reflecting
transferred control of the asset.
the transaction’s economic substance to the Bank. The
difference between the purchase and resale prices is
On de-recognition of a financial asset, the difference
recorded as ‘Interest income’ and is accrued over the life of
between the carrying amount of the asset (or the carrying
the agreement using the effective interest rate. If securities
amount allocated to the portion of the asset derecognized)
purchased under agreement to resell are subsequently
and the sum of the consideration received (including any
sold to third parties, the obligation to return the securities is
new asset obtained less any new liability assumed) and any
recorded as a short sale within ‘Financial liabilities held for
cumulative gain or loss that had been recognized in other
trading’ and measured at fair value with any gains or losses
comprehensive income is recognized in profit or loss.
included in ‘Net trading income’.

When Bank has transferred its rights to receive cash

flows from an asset or has entered into a pass-through OFFSETTING OF FINANCIAL INSTRUMENTS
arrangement and has neither transferred nor retained Financial assets and financial liabilities are offset and
substantially all of the risks and rewards of the asset nor the net amount presented in the Statement of Financial
transferred control of the asset, the asset is recognized to Position when and only when Bank has a legal right to set
the extent of the Bank’s continuing involvement in the asset. off the recognized amounts and it intends either to settle
In that case, Bank also recognizes an associated liability. The on a net basis or to realize the asset and settle the liability
transferred asset and the associated liability are measured simultaneously. Income and expenses are presented on a
on a basis that reflects the rights and obligations that Bank net basis only when permitted under NFRSs or for gains and
has retained. losses arising from a group of similar transaction such as in
trading activity.
When Bank’s continuing involvement that takes the form
of guaranteeing the transferred asset, the extent of the AMORTIZED COST MEASUREMENT
continuing involvement is measured at the lower of the The Amortized cost of a financial asset or liability is the
original carrying amount of the asset and the maximum amount at which the financial asset or liability is measured
amount of consideration received by Bank that Bank could at initial recognition, minus principal repayments, plus or
be required to repay. minus the cumulative amortization using the effective
interest method of any difference between the initial amount
3.4.4. (B) DE-RECOGNITION OF FINANCIAL LIABILITIES recognized and the maturity amount, minus any reduction
A financial liability is derecognized when the obligation under for impairment.
the liability is discharged or cancelled or expired. Where an
existing financial liability is replaced by another from the FAIR VALUE MEASUREMENT
same lender on substantially different terms or the terms ‘Fair value’ is the price that would be received to sell
of an existing liability are substantially modified, such an an asset or paid to transfer a liability (exit price) in an
exchange or modification is treated as de-recognition of the orderly transaction between market participants at the
original liability and the recognition of a new liability.

ANNUAL 237
REPORT 2023-24
 measurement date in the principal or, in its absence, the A fair value measurement of a non-financial asset takes into
most advantageous market to which the Bank has access account a market participant’s ability to generate economic
at that date. The fair value of liability reflects its non- benefits by using the asset in its highest best use or by selling
performance risk. When available, the Bank measures the fair it to another market participant that would use the asset in
value of an instrument using the quoted price in an active its highest and best use.
market for that instrument (Level 01 valuation). A market is
regarded as active if transactions for the asset or liability The Bank recognizes transfers between levels of the fair value
take place with sufficient frequency and volume to provide hierarchy as of the end of the reporting period during which
pricing information on an ongoing basis on an arm’s length the change has occurred.
basis.
IMPAIRMENT OF FINANCIAL ASSETS
If there is no quoted price in an active market, then the Bank Bank assesses at each reporting date, whether there is
uses valuation techniques that maximize the use of relevant any objective evidence that a financial asset or group of
observable inputs and minimize the use of unobservable financial assets not carried at fair value through profit or loss
inputs. The chosen valuation technique incorporates all of is impaired. A financial asset or group of financial assets
the factors that market participants would take into account is deemed to be impaired if and only if there is objective
in pricing a transaction. Valuation techniques include using evidence of impairment as a result of one or more events,
recent arm’s length transactions between knowledgeable, that have occurred after the initial recognition of the asset
willing parties (if available), reference to the current fair (an ‘incurred loss event’) and that loss event (or events) has
value of other instruments that are substantially the same, an impact on the estimated future cash flows of the financial
discounted cash flow analyses and option pricing models. asset or group of financial assets that can be reliably
Inputs to valuation techniques reasonably represent market estimated.
expectations and measures of the risk-return factors
inherent in the financial instrument. The Bank calibrates Evidence of impairment may include: indications that the
valuation techniques and tests them for validity using borrower or a group of borrowers is experiencing significant
prices from observable current market transactions in the financial difficulty; the probability that they will enter
same instrument or based on other available observable bankruptcy or other financial reorganization; default or
market data. Assets and long positions are measured at a delinquency in interest or principal payments; and where
bid price; liabilities and short positions are measured at an observable data indicates that there is a measurable
ask price. Where the Bank has positions with offsetting risks, decrease in the estimated future cash flows, such as
mid-market prices are used to measure the offsetting risk changes in arrears or economic conditions that correlate
positions and a bid or asking price adjustment is applied only with defaults.
to net open position as appropriate.

3.4.5. (A) IMPAIRMENT OF FINANCIAL ASSETS

The best evidence of the fair value of a financial instrument
CARRIED AT AMORTIZED COST
at initial recognition is normally the transaction price - i.e. the
For financial assets carried at amortized cost, such as
fair value of the consideration given or received. If the Bank
amounts due from banks, held to maturity investments etc.,
determines that the fair value at initial recognition differs
Bank first assesses individually whether objective evidence
from the transaction price and the fair value is evidenced
of impairment exists for financial assets that are individually
neither by a quoted price in an active market for an identical
significant or collectively for financial assets that are not
asset or liability (Level 01 valuation) nor based on a valuation
individually significant. In the event Bank determines that no
technique that uses only data from observable markets
objective evidence of impairment exists for an individually
(Level 02 valuation), then the financial instrument is initially
assessed financial asset, it includes the asset in a group of
measured at fair value, adjusted to defer the difference
financial assets with similar credit risk characteristics such
between the fair value at initial recognition and the
as collateral type, past due status and other relevant factors
transaction price. Subsequently, that difference is recognized
and collectively assesses them for impairment. However,
in profit or loss on an appropriate basis over the life of the
assets that are individually assessed for impairment and for
instrument but not later than when the valuation is wholly
which an impairment loss is or continues to be recognized
supported by observable market data or the transaction is
are not included in a collective assessment of impairment.
closed out.

If there is an objective evidence that an impairment loss

Fair values reflect the credit risk of the instrument and
has been incurred, the amount of the loss is measured as
include adjustments to take account of the credit risk of the
the difference between the assets’ carrying amount and
Bank entity and the counterparty where appropriate. Fair
the present value of estimated future cash flows (excluding
value estimates obtained from models are adjusted for any
future expected credit losses that have not yet been
other factors, such as liquidity risk or model uncertainties;
incurred). The carrying amount of the asset is reduced
to the extent that the Bank believes a third-party market
through the use of an allowance account and the amount
participant would take them into account in pricing a
of the loss is recognized in the income statement. Interest
transaction.
income continues to be accrued on the reduced carrying
amount and is accrued using the rate of interest used to
The fair value of a demand deposit is not less than the
discount the future cash flows for the purpose of measuring
amount payable on demand, discounted from the first date
the impairment loss.
on which the amount could be required to be paid.

ANNUAL
238 REPORT 2023-24
If a loan has a variable interest rate, the discount rate  Bank’s aggregate exposure to the customer;
for measuring any impairment loss is the current rate
closely approximates effective interest rate. If the Bank  The viability of the customer’s business model and their
has reclassified trading assets to loans and advances, the capacity to trade successfully out of financial difficulties
discount rate for measuring any impairment loss is the new and generate sufficient cash flows to service debt
closely approximates effective interest rate determined obligations;
at the reclassification date. The calculation of the present
 The amount and timing of expected receipts and
value of the estimated future cash flows of a collateralized
recoveries;
financial asset reflects the cash flows that may result from
foreclosure less costs for obtaining and selling the collateral,  The extent of other creditors ‘commitments ranking
whether or not foreclosure is probable. ahead of, or pari-pasu with the Bank and the likelihood of
other creditors continuing to support the company;
3.4.5. (A) (I) INDIVIDUALLY ASSESSED FINANCIAL ASSETS
The criteria used to determine whether there is objective  The realizable value of security and likelihood of
evidence of impairment include and not limited to: successful repossession;

 Known Cash Flow difficulties experienced by the 3.4.5. (A) (II) COLLECTIVELY ASSESSED FINANCIAL ASSETS
borrowers: Impairment is assessed on a collective basis in two
circumstances:
 Past due contractual payments of either principal or
interest;  To cover losses which have been incurred but have
not yet been identified on loans subject to individual
 Breach of loan covenants or conditions; assessment; and

 The probability that the borrower will enter bankruptcy or  For homogeneous groups of loans that are not
other financial reorganization; and considered individually significant.

 A significant downgrading in credit rating by an external

credit rating agency.  INCURRED BUT NOT YET IDENTIFIED IMPAIRMENT
Individually assessed financial assets for which no evidence
If there is objective evidence that an impairment loss on of loss has been specifically identified on an individual
financial assets measured at amortized cost has been basis are grouped together according to their credit risk
incurred, the amount of the loss is measured by discounting characteristics for the purpose of calculating an estimated
the expected future cash flows of a financial asset at its collective loss. This reflects impairment losses that the Bank
original effective interest rate and comparing the resultant has incurred as a result of events occurring before the
present value with the financial asset’s current carrying reporting date, which the Bank is not able to identify on an
amount. The impairment allowances on individually individual loan basis and that can be reliably estimated.
significant accounts are reviewed more regularly when
circumstances require. This normally encompasses re- These losses will only be individually identified in the future.
assessment of the enforceability of any collateral held and As soon as information becomes available which identifies
the timing and amount of actual and anticipated receipts. losses on individual financial assets within the group, those
Individually assessed impairment allowances are only financial assets are removed from the group and assessed
released when there is reasonable and objective evidence on an individual basis for impairment.
of reduction in the established loss estimate. Interest on
impaired assets continues to be recognized through the The collective impairment allowance is determined after
unwinding of the discount. taking into account:

Loans together with the associated allowance are written  Historical Loss Experience in portfolios of similar credit risk;
off when there is no realistic prospect of future recovery and
and all collateral has been realized or has been transferred
to the Bank. If, in a subsequent year, the amount of the  Management’s experienced judgment as to whether
estimated impairment loss increases or decreases because current economic and credit conditions are such that
of an event occurring after the impairment was recognized, the actual level of inherent losses at the reporting date is
the previously recognized impairment loss is increased or like to be greater or less than that suggested by historical
reduced by adjusting the allowance account. If a future experience.
write off is later recovered, the recovery is credited to the
impairment charges for loans and other losses. HOMOGENEOUS GROUPS OF FINANCIALS ASSETS
When impairment losses are determined for those financial Statistical methods are used to determine impairment
assets where objective evidence of impairment exists, the losses on a collective basis for homogenous groups of
following common factors are considered: financial assets. Losses in these groups of financial assets
are recorded on an individual basis when individual financial
assets are written off, at which point they are removed from

ANNUAL 239
REPORT 2023-24
 the group. from the realization of security.

Bank uses the following method to calculate historical loss 3.4.5. (A) (V) IMPAIRMENT OF RESCHEDULED LOANS AND ADVANCES
experience on collective basis: Where possible, the Bank seeks to restructure loans
rather than to take possession of collateral. This may
After grouping of loans on the basis of homogeneous risks, involve extending the payment arrangements and the
the Bank uses net flow rate method. Under this methodology agreement of new loan conditions. Once the terms have
the movement in the outstanding balance of customers been renegotiated, any impairment is measured using the
into default categories over the periods is used to estimate original EIR as calculated before the modification of terms
the amount of financial assets that will eventually be and the loan is no longer considered past due. Management
irrecoverable, as a result of the events occurring before the continually reviews renegotiated loans to ensure that all
reporting date which the Bank is not able to identify on an criteria are met and that future payments are likely to occur.
individual loan basis. The loans continue to be subject to a criteria are met and
that future payments are likely to occur. The loans continue
Under this methodology, loans are grouped into ranges to be subject to an individual or collective impairment
according to the number of days in arrears and statistical assessment, calculated using the loan’s original effective
analysis is used to estimate the likelihood that loans in interest rate (EIR).
each range will progress through the various stages of
delinquency and ultimately prove irrecoverable.
3.4.5. (A) (VI) COLLATERAL VALUATION
The Bank seeks to use collateral, where possible, to
Current economic conditions and portfolio risk factors are
mitigate its risks on financial assets. The collateral comes
also evaluated when calculating the appropriate level of
in various forms such as cash, securities, letters of credit/
allowance required to cover inherent loss. These additional
guarantees, real estate, receivables, inventories, other non-
macro and portfolio risk factors may include:
financial assets and credit enhancements such as netting
agreements. The fair value of collateral is generally assessed,
 Recent loan portfolio growth and product mix
at a minimum, at inception and based on the guidelines
 Unemployment rates issued by the Nepal Rastra Bank. Non-financial collateral,
such as real estate, is valued based on data provided by
 Gross Domestic Production (GDP) Growth third parties such as independent valuator and audited
financial statements.
 Inflation

 Interest rates 3.4.5. (A) (VII) COLLATERAL LEGALLY REPOSSESSED OR WHERE

PROPERTIES HAVE DEVOLVED TO THE BANK
 Changes in government laws and regulations Legally Repossessed Collateral represents Non-Financial
Assets acquired by the Bank in settlement of the overdue
 Property prices loans. The assets are initially recognized at fair value when
acquired. The Bank’s policy is to determine whether a
 Payment status repossessed asset is best used for its internal operations or
should be sold. The proceeds are used to reduce or repay
But, the amount of provision to be created against Loans and the outstanding claim. The immovable property acquired by
Advances shall be higher of the following two amounts: foreclosure of collateral from defaulting customers, or which
has devolved on the Bank as part settlement of debt, has not
i) Impairment calculated as per Impairment Assessment been occupied for business use.
Methodology as described above or,
ii) Loan Loss Provision calculated as per the provisions of
3.4.5. (B) IMPAIRMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH
Unified Directives issued by Nepal Rastra Bank. OCI
For financial assets at fair value through OCI, Bank assesses
3.4.5. (A) (III) REVERSAL OF IMPAIRMENT at each reporting date whether there is objective evidence
If the amount of an impairment loss decreases in a that an investment is impaired.
subsequent period and the decrease can be related
objectively to an event occurring after the impairment In the case of debt instruments, Bank assesses individually
was recognized, the excess is written back by reducing the whether there is objective evidence of impairment based
financial asset Impairment allowance account accordingly. on the same criteria as financial assets carried at amortized
The write-back is recognized in the Statement of Profit or cost. However, the amount recorded for impairment is
Loss. the cumulative loss measured as the difference between
the amortized cost and the current fair value, less any
3.4.5. (A) (IV) WRITE-OFF OF FINANCIAL ASSETS CARRIED AT impairment loss on that investment previously recognized
AMORTIZED COST in the Statement of Profit or Loss. Future interest income
Financial assets (and the related impairment allowance is based on the reduced carrying amount and is accrued
accounts) are normally written off either partially or in full, using the rate of interest used to discount the future cash
when there is no realistic prospect of recovery. Where there flows for the purpose of measuring the impairment loss. If,
is no realistic prospect of recovery. Where financial assets in a subsequent period, the fair value of a debt instrument
are secured, this is generally after receipt of any proceeds

ANNUAL
240 REPORT 2023-24
increases and the increase can be objectively related to 16 (Property, Plant and Equipment) in accounting for these
a credit event occurring after the impairment loss was assets. Property, plant and equipment are recognized if it is
recognized, the impairment loss is reversed through the probable that future economic benefits associated with the
Statement of Profit or Loss. asset will flow to the entity and the cost of the asset can be
measured reliably measured.
In the case of equity investments classified as financial
assets at fair value through OCI, objective evidence would MEASUREMENT
also include a ‘significant’ or ‘prolonged’ decline in the An item of property, plant and equipment that qualifies
fair value of the investment below its cost. Where there is for recognition as an asset is initially measured at its cost.
evidence of impairment, the cumulative loss measured as Cost includes expenditure that is directly attributable to
the difference between the acquisition cost and the current the acquisition of the asset and cost incurred subsequently
fair value, less any impairment loss on that investment to add to, replace part of an item of property, plant&
previously recognized in Statement of Profit or Loss is equipment. The cost of self-constructed assets includes the
removed from equity and recognized in the Statement of cost of materials and direct labor, any other costs directly
Profit or Loss. However, any subsequent increase in the fair attributable to bringing the asset to a working condition for
value of an impaired equity security that is classified as its intended use and the costs of dismantling and removing
financial assets at fair value through OCI is recognized in the items and restoring the site on which they are located.
other comprehensive income. Purchased software that is integral to the functionality of
the related equipment is capitalized as part of computer
Bank writes-off certain financial assets at fair value through equipment. When parts of an item of property or equipment
OCI when they are determined to be uncollectible. have different useful lives, they are accounted for as
separate items (major components) of property, plant and
3.5 TRADING ASSETS equipment.
One of the categories of financial assets at fair value through
profit or loss is “held for trading” financial assets. All financial COST MODEL
assets acquired or held for the purpose of selling in the short Property and equipment is stated at cost excluding the costs
term or for which there is a recent pattern of short term profit of day–to–day servicing, less accumulated depreciation and
taking are trading assets. accumulated impairment in value. Such cost includes the
cost of replacing part of the equipment when that cost is
3.6 DERIVATIVES ASSETS AND DERIVATIVE LIABILITIES incurred, if the recognition criteria are met.
A derivative is a financial instrument whose value changes
in response to the change in an underlying variable such as REVALUATION MODEL
an interest rate, commodity or security price, or index; that The Bank has not applied the revaluation model to the any
requires no initial investment, or one that is smaller than class of freehold land and buildings or other assets. Such
would be required for a contract with similar response to properties are carried at a previously recognized GAAP
changes in market factors; and that is settled at a future Amount.
date.
On revaluation of an asset, any increase in the carrying
Forward contracts are the contracts to purchase or sell a amount is recognized in ‘Other comprehensive income’ and
specific quantity of a financial instrument, a commodity, accumulated in equity, under revaluation reserve or used
or a foreign currency at a specified price determined at to reverse a previous revaluation decrease relating to the
the outset, with delivery or settlement at a specified future same asset, which was charged to the Statement of Profit
date. Settlement is at maturity by actual delivery of the item or Loss. In this circumstance, the increase is recognized as
specified in the contract, or by a net cash settlement. income to the extent of previous write down. Any decrease
in the carrying amount is recognized as an expense in
All freestanding contacts that are considered derivatives the Statement of Profit or Loss or debited to the Other
for accounting purposes are carried at fair value on the Comprehensive income to the extent of any credit balance
statement of financial position regardless of whether they existing in the revaluation reserve in respect of that asset.
are held for trading or non-trading purposes. Changes in The decrease recognized in other comprehensive
fair value on derivatives held for trading are included in income reduces the amount accumulated in equity
net gains/ (losses) from financial instruments in fair value under revaluation reserves. Any balance remaining in the
through profit or loss on financial assets/ liabilities at fair revaluation reserve in respect of an asset is transferred
value through profit or loss. directly to retained earnings on retirement or disposal of the
asset.
3.7 PROPERTY, PLANT AND EQUIPMENT
SUBSEQUENT COST
RECOGNITION The subsequent cost of replacing a component of an item of
Property, plant and equipment are tangible items that are property, plant and equipment is recognized in the carrying
held for use in the production or supply of services, for rental amount of the item, if it is probable that the future economic
to others or for administrative purposes and are expected benefits embodied within that part will flow to the Bank and
to be used during more than one period. The Bank applies it can be reliably measured. The cost of day to day servicing
the requirements of the Nepal Accounting Standard - NAS of property, plant and equipment are charged to the
Statement of Profit or Loss as incurred.

ANNUAL 241
REPORT 2023-24
 DEPRECIATION
Freehold land is not depreciated although it is subject to impairment testing. Depreciation on other assets is calculated using
the straight-line method to allocate their cost to their residual values over their estimated useful lives as per management
judgement, as follows:

ASSET CATEGORY AS OF JULY 15, 2024 AS OF JULY 16, 2023

Buildings 50 years 50 years

Vehicles 10 years 10 years

Office Equipment 7 years 7 years

Furniture & Fixtures-Wooden 10 years 10 years

Furniture & Fixtures-Metal 7 years 7 years

Furniture & Fixtures-Plastic 5 years 5 years

Battery 3 years 3 years

Computer hardware 7 years 7 years

Leasehold Properties Lease term Lease term

Sign Board/Mats and Carpets 2 Years 2 Years

CHANGES IN ESTIMATES 3.8. GOODWILL AND INTANGIBLE ASSETS

The assets’ residual values and useful lives are reviewed, and
adjusted if appropriate, at each financial year end. The value RECOGNITION
of the assets fully depreciated but continued to be in use is An intangible asset is an identifiable non-monetary asset
considered not material. without physical substance, held for use in the production
or supply of goods or services, for rental to others or for
CAPITAL WORK IN PROGRESS administrative purposes. An intangible asset is recognized
These are expenses of capital nature directly incurred in if it is probable that the future economic benefits that are
the construction of buildings, major plant and machinery attributable to the asset will flow to the entity and the cost
and system development, awaiting capitalization. Capital of the asset can be measured reliably. An intangible asset
work-in-progress would be transferred to the relevant asset is initially measured at cost. Expenditure incurred on an
when it is available for use, i.e. when it is in the location and intangible item that was initially recognized as an expense
condition necessary for it to be capable of operating in the by the Bank in previous annual Financial Statements or
manner intended by management. Capital work-in-progress interim Financial Statements are not recognized as part of
is stated at cost less any accumulated impairment losses. the cost of an intangible asset at a later date.

BORROWING COSTS COMPUTER SOFTWARE & LICENSES

Borrowing costs directly attributable to the acquisition, Cost of purchased licenses and all computer software
construction or production of an asset that necessarily takes costs incurred, licensed for use by the Bank, which are not
a substantial period of time to get ready for its intended integrally related to associated hardware, which can be
use or sale are capitalized as part of the cost of an asset. All clearly identified, reliably measured, and it’s probable that
other borrowing costs are expensed in the period in which they will lead to future economic benefits, are included
they occur. Borrowing costs consist of interest and other in the Statement of Financial Position under the category
costs that the Bank incurs in connection with the borrowing ‘Intangible assets’ and carried at cost less accumulated
of funds. amortization and any accumulated impairment losses.

DE-RECOGNITION SUBSEQUENT EXPENDITURE

The carrying amount of an item of property, plant and Expenditure incurred on software is capitalized only when
equipment is derecognized on disposal or when no future it is probable that this expenditure will enable the asset to
economic benefits are expected from its use. The gain or generate future economic benefits in excess of its originally
loss arising from de-recognition of an item of property, plant assessed standard of performance and this expenditure can
and equipment is included in the Statement of Profit or Loss be measured and attributed to the asset reliably. All other
when the item is derecognized. When replacement costs are expenditure is expensed as incurred.
recognized in the carrying amount of an item of property,
plant and equipment, the remaining carrying amount of
the replaced part is derecognized. Major inspection costs
are capitalized. At each such capitalization, the remaining
carrying amount of the previous cost of inspections is
derecognized.

ANNUAL
242 REPORT 2023-24
GOODWILL IS MEASURED AT COST LESS ACCUMULATED IMPAIRMENT equity or in other comprehensive income. The Management
LOSSES.
periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is
AMORTIZATION OF INTANGIBLE ASSETS subject to interpretation. It establishes provisions where
Intangible Assets, except for goodwill, are amortized on a appropriate on the basis of amounts expected to be paid to
straight–line basis in the Statement of Profit or Loss from the tax authorities.
date when the asset is available for use, over the best of its
useful economic life based on a pattern in which the asset’s
CURRENT TAX
economic benefits are consumed by the Bank. Amortization
Current tax assets and liabilities consist of amounts
methods, useful lives, residual values are reviewed at each
expected to be recovered from or paid to Inland Revenue
financial year end and adjusted if appropriate. The Bank
Department in respect of the current year, using the tax
assumes that there is no residual value for its intangible
rates and tax laws enacted or substantively enacted on the
assets.
reporting date and any adjustment to tax payable in respect
of prior years.

ASSET CATEGORY AS OF JULY 15, 2024 AS OF JULY 16, 2023

DEFERRED TAX
Software Useful life or 7 Useful life or 7  Deferred tax is provided on temporary differences at
years, whichever is years, whichever the reporting date between the tax bases of assets
lower is lower and liabilities and their carrying amounts for financial
reporting purposes. Deferred tax liabilities are recognized
for all taxable temporary differences except:
DE-RECOGNITION OF INTANGIBLE ASSETS
 Where the deferred tax liability arises from the initial
The carrying amount of an item of intangible asset is
recognition of goodwill or of an asset or liability in a
derecognized on disposal or when no future economic
transaction that is not a business combination, and at the
benefits are expected from its use. The gain or loss arising on
time of transaction, affects neither the accounting profit
de recognition of an item of intangible assets is included in
nor taxable profit or loss.
the Statement of Profit or Loss when the item is derecognized.
 In respect of taxable temporary differences associated
3.9. INVESTMENT PROPERTY with investments in subsidiaries, where the timing of the
Investment property is property (land or a building or part of reversal of the temporary differences can be controlled
a building or both) held (by the owner or by the lessee under and is probable that the temporary differences will not
a finance lease) to earn rentals or for capital appreciation or reverse in the foreseeable future.
both but not for sale in the ordinary course of business.
Deferred tax assets are recognized for all deductible
MEASUREMENT temporary differences, carried forward unused tax credits
Investment property is accounted for under Cost Model in and unused tax losses (if any), to the extent that it is probable
the Financial Statements. Accordingly, after recognition as that the taxable profit will be available against which the
an asset, the property is carried at its cost, less impairment deductible temporary differences, carried forward unused
losses. If any property is reclassified to investment property tax credits and unused tax losses can be utilized except:
due to changes in its use, fair value of such property at the
date of reclassification becomes its cost for subsequent  Where the deferred tax asset relating to the deductible
accounting. temporary differences arising from the initial recognition
of an asset or liability in a transaction that is not a
business combination, and at the time of transaction,
DE-RECOGNITION
affects neither the accounting profit nor taxable profit or
Investment properties are derecognized when they are
loss.
disposed of or permanently withdrawn from use since
no future economic benefits are expected. Transfers are
 In respect of deductible temporary differences
made to and from investment property only when there is
associated with investments in Subsidiaries, deferred
a change in use. When the use of a property changes such
tax assets are recognized only to the extent that it is
that it is reclassified as Property, Plant and Equipment, its
probable that the temporary differences will reverse in
fair value at the date of reclassification becomes its cost for
the foreseeable future and taxable profit will be available
subsequent accounting.
against which the temporary difference will be utilized.

INCOME TAX
As per Nepal Accounting Standard- NAS 12 (Income The carrying amount of deferred tax assets is reviewed at
Taxes) tax expense is the aggregate amount included in each reporting date and reduced to the extent that it is
determination of profit or loss for the period in respect probable that sufficient profit will be available to allow the
of current and deferred taxation. Income Tax expense is deferred tax asset to be utilized. Unrecognized deferred
recognized in the statement of Profit or Loss, except to the tax assets are reassessed at each reporting date and are
extent it relates to items recognized directly in equity or other recognized to the extent that it has become probable that
comprehensive income in which case it is recognized in future taxable profit will allow the deferred tax asset to be
recovered.

ANNUAL 243
REPORT 2023-24
 Deferred tax assets and liabilities are measured at the tax using the rate that closely approximates the EIR because
rates that are expected to apply in the year when the asset the Bank considers that the cost of exact calculation of
is realized or the liability is settled, based on tax rates (and effective interest rate method exceeds the benefit that
tax laws) that have been enacted or substantively enacted would be derived from such compliance. EIR is the rate
at the reporting date. that exactly discounts estimated future cash payments or
Current and deferred tax assets and liabilities are offset only receipts through the expected life of the financial instrument
to the extent that they relate to income taxes imposed by or a shorter period, where appropriate, to the net carrying
the same taxation authority. amount of the financial asset or financial liability.

3.11. DEPOSITS, DEBT SECURITIES ISSUED When a receivable is impaired, the Bank reduces the carrying
AND SUBORDINATED LIABILITIES amount to its recoverable amount, being the estimated
Deposits, debt securities issued and subordinated liabilities future cash flow discounted at the original effective interest
are the Bank’s sources of funding. Deposits include non- rate of the instrument, and continues unwinding the discount
interest bearing deposits, saving deposits, term deposits, as interest income. Interest income on impaired loans is
call deposits and margin deposits. The estimated fair value recognized using the original closely approximate EIR.
of deposits with no stated maturity period is the amount
repayable on demand. The fair value of fixed interest bearing However, interest accrual is suspended and are not
deposits is considered as the interest receivable on these recognized as Interest income in the Statement of Profit or
deposits plus carrying amount of these deposits. The fair Loss in following circumstances:
value of debt securities issued is also considered as the
a. Loans where there is reasonable doubt about the ultimate
carrying amount of these debt securities issued. Sub-
collectability of principal or interest
ordinated liabilities are liabilities subordinated, at the event
of winding up, to the claims of depositors, debt securities b. Loans against which individual impairment as per carve
issued and other creditors. out of NFRS 9 has been made

3.12. PROVISIONS c. Loans where contractual payments of principal and/or

A provision is recognized if, as a result of a past event, interest are more than 3 months in arrears and where
the Bank has a present legal or constructive obligation the “net realizable value” of security is insufficient to cover
that can be estimated reliably, and it is probable that an payment of principal and accrued interest
outflow of economic benefits will be required to settle the
d. Loans where contractual payments of principal and/or
obligation. The amount recognized is the best estimate of
interest are more than 12 months in arrears, irrespective of
the consideration required to settle the present obligation
the net realizable value of collateral
at the reporting date, taking in to account the risks and
uncertainties surrounding the obligation at that date. Where e. Overdrafts and other short term facilities which have not
a provision is measured using the cash flows estimated been settled after the expiry of the loan and even not
to settle the present obligation, its carrying amount is renewed within 3 months of the expiry, and where the net
determined based on the present value of those cash realizable value of security is insufficient to cover payment
flows. A provision for onerous contracts is recognized when of principal and accrued interest
the expected benefits to be derived by the Bank from a
contract are lower than the unavoidable cost of meeting its f. Overdrafts and other short term facilities which have not
obligations under the contract. The provision is measured been settled after the expiry of the loan and even not
as the present value of the lower of the expected cost of renewed within 12 months of the expiry, irrespective of the
terminating the contract and the expected net cost of net realizable value of collateral
continuing with the contract. Provision is not recognized for
future operating losses. Following above criterias, the Bank has created interest
suspense of NPR 357,546,886 as of July 15, 2024.
Before a provision is established, the Bank recognizes any
impairment loss on the assets associated with that contract. The Bank has collected NPR 597,020,555/- up to August
The expense relating to any provision is presented in the 16, 2024 which has been deducted while calculating the
Statement of Profit or Loss net of any reimbursement. amount of interest accrual to be suspended.

3.13. REVENUE RECOGNITION FEE AND COMMISSION INCOME

Revenue is recognized to the extent that it is probable that Fees earned for the provision of services over a period
the economic benefits will flow to Bank and the revenue of time are accrued over that period. These fees include
can be reliably measured. The following specific recognition Service fees, commission income. Loan syndication fees
criteria must also be met before revenue is recognized. are recognized as revenue when the syndication has
been completed and the Bank retained no part of the loan
INTEREST INCOME package for itself, or retained a part at the same effective
For all financial assets measured at amortized cost, interest interest rate as for the other participants. Portfolio and other
bearing financial assets classified as financial assets at management advisory fees and service distribution fees
fair value through OCI and financial assets designated at are recognized based on the applicable contracts, usually
fair value through profit or loss, interest income is recorded on a time apportionment basis. However, income from LC
issuance is recognized at the time of issuance of letter of
credit.

ANNUAL
244 REPORT 2023-24
DIVIDEND INCOME employment life insurance and post-employment
Dividend income is on equity instruments are recognized in medical care;
the statement of profit and loss within other income when
the Bank’s right to receive payment is established.  Other long term employee benefits and

 Termination benefits
NET TRADING INCOME
Net trading income comprises gains less losses relating
to trading assets and liabilities, and includes all realized 3.15.1. POST EMPLOYMENTS BENEFITS
interest, dividend and foreign exchange differences as wells DEFINED CONTRIBUTION PLANS
as unrealized changes in fair value of trading assets and A defined contribution plan is a post-employment benefit
liabilities. plan under which an Bank pays fixed contribution into a
separate Bank (a fund) and will have no legal or constructive
obligation to pay further contributions if the fund does not
NET INCOME FROM OTHER FINANCIAL INSTRUMENT AT FAIR VALUE
THROUGH PROFIT OR LOSS hold sufficient assets to pay all employee benefits relating
Trading assets such as equity shares and mutual fund are to employee services in the current and prior periods, as
recognized at fair value through profit or loss. No other defined in Nepal Accounting Standards – NAS 19 (Employee
financial instruments are designated at fair value through Benefits).
profit or loss. The bank has no income under the heading net
income from other financial instrument at fair value through The contribution payable by the employer to a defined
profit or loss. contribution plan in proportion to the services rendered to
Bank by the employees and is recorded as an expense under
‘Personnel expense’ as and when they become due. Unpaid
3.14 INTEREST EXPENSE
contribution is recorded as a liability under ‘Other Liabilities’.
For financial liabilities measured at amortized cost using
Bank contributed 10% on the salary of each employee to
the rate that closely approximates effective interest rate,
the Employees’ Provident Fund. The above expenses are
interest expense is recorded using such rate. EIR is the rate
identified as contributions to ‘Defined Contribution Plans’ as
that exactly discounts estimated future cash payments or
defined in Nepal Accounting Standards – NAS 19 (Employee
receipts through the expected life of the financial instrument
Benefits).
or a shorter period, where appropriate, to the net carrying
amount of the financial asset or financial liability.
DEFINED BENEFIT PLANS
A defined benefit plan is a post-employment benefit plan
3.15 EMPLOYEE BENEFITS other than a defined contribution plan. Accordingly, staff
Employee benefits include: gratuity has been considered as defined benefit plans as per
Nepal Accounting Standards – NAS 19 (Employee Benefits).
 Short-term employee benefits such as the following,
if expected to be settled wholly before twelve months
GRATUITY
after the end of the annual reporting period in which the
In compliance with Labor Act, 2017, provision is made in the
employees render the related services:
account year of service, for gratuity payable to employees
i. Wages, salaries and social security contributions; who joined bank on a permanent basis.
An actuarial valuation is carried out every year to ascertain
ii. Paid annual leave and paid sick leave; the full liability under gratuity.

iii. Profit sharing and bonuses, and Bank’s obligation in respect of defined benefit obligation is
iv.Non-monetary benefits (such as medical care, calculated by estimating the amount of future benefit that
employees have earned for their service in the current and
housing, cars and free or subsidized goods or services) for prior periods and discounting that benefit to determine its
current employees; present value, then deducting the fair value of any plan
assets to determine the net amount to be shown in the
Short term employee benefits are measured on an Statement of Financial Position. The value of a defined
undiscounted basis and are expensed as the related service benefit asset is restricted to the present value of any
is provided. A liability is recognized for the amount expected economic benefits available in the form of refunds from the
to be paid under short term cash bonus or profit sharing plan or reduction on the future contributions to the plan. In
plans if the Bank has present legal or constructive obligation order to calculate the present value of economic benefits,
to pay this amount as a result of past service provided by consideration is given to any minimum funding requirement
the employee and the obligation can be estimated reliably. that apply to any plan in Bank. An economic benefit is
available to Bank if it is realizable during the life of the plan, or
 Post-employment benefits, such as the following: on settlement of the plan liabilities.

i. Retirement benefits (e.g.: pensions, lump sum payments

Bank determines the interest expense on the defined benefit
on retirement); and
liability by applying the discount rate used to measure the
defined benefit liability at the beginning of the annual period
ii. Other post-employment benefits such as post-
to the defined benefit liability at the beginning of the annual
period. The discount rate is the yield at the reporting date on

ANNUAL 245
REPORT 2023-24
 government bonds that have maturity dates approximating is included in ‘Other liabilities’. A finance lease and its
to the terms of Bank’s obligations. corresponding liability are recognized initially at the fair value
of the asset or if lower, the present value of the minimum
The increase in gratuity liabilities attributable to the services lease payments. Finance charges payable are recognized in
provided by employees during the year ended 15th July, 2024 ‘Interest expenses’ over the period of the lease based on the
(current service cost) has been recognized in the Statement interest rate implicit in the lease so as to give a constant rate
of Profit or Loss under ‘Personnel Expenses’ together with the of interest on the remaining balance of the liability.
net interest expense. Bank recognizes the total actuarial gain
and loss that arises in calculating Bank’s obligation in respect 3.16.2 OPERATING LEASE
of gratuity in other comprehensive income during the period All leases except for financial leases are classified as
in which it occurs. operating leases. When acting as lessor, Bank includes the
assets subject to operating leases in ‘Property, plant and
The demographic assumptions underlying the valuation are equipment’ and accounts for them accordingly. Impairment
retirement age (60 years), early withdrawal from service and losses are recognized to the extent that residual values are
retirement on medical grounds. not fully recoverable and the carrying value of the assets is
thereby impaired.
3.15.2. OTHER LONG TERM EMPLOYEE BENEFITS
Other long term employee benefits are all employee When Bank is the lessee, leased assets are not recognized on
benefits other than short term employee benefits, post- the Statement of Financial Position.
employment benefits and terminal benefits. Accordingly,
leave encashment plan of the Bank has been considered as From FY 2021-22, the Bank has transitioned from NAS-17 and
Other Long Term Employee Benefits as per Nepal Accounting has applied NFRS-16 for accounting of leases. All previously
Standards – NAS 19 (Employee Benefits). classified operating leases are now recognized as right-of-
use assets with corresponding lease liabilities. Each lease
Unutilized Accumulated Leave payment is allocated between a reduction of the liability and
Bank’s liability towards the accumulated leave which is an interest expense. The interest expense is charged to the
expected to be utilized beyond one year from the end Statement of Profit or Loss over the lease period to produce a
of the reporting period is treated as other long term constant periodic rate of interest on the remaining balance
employee benefits. Bank’s net obligation towards unutilized of the liability for each period. The right-of-use asset is
accumulated leave is calculated by discounting the amount depreciated over the remaining lease term on a straight line
of future benefit that employees have earned in return for basis.
their service in the current and prior periods to determine
the present value of such benefits. The discount rate is The Bank transitioned into NFRS 16 in accordance with
the yield at the reporting date on government binds that the modified retrospective approach, therefore previous
have maturity dates approximating to the terms of Bank’s year comparative figures are not restated. Additionally,
obligation. The calculation is performed using the Projected the definition of a lease under NAS 17 and its related
Unit Credit method. Net change in liability for unutilized interpretation has been retained.
accumulated leave including any actuarial gain and loss are The Bank has applied incremental borrowing rate of
recognized in the Statement of Profit or Loss under ‘Personnel 7.5%. Management has applied judgement and formed
Expenses’ in the period in which they arise. assumptions in relation to assessing the incremental
borrowing rate. Management has formed its judgements
Finance and Operating Leases The determination of whether and assumptions based on historical experience, internal
an arrangement is a lease or it contains a lease, is based and external data points.
on the substance of the arrangement and requires an
assessment of whether the fulfillment of the arrangement is 3.17. FOREIGN CURRENCY TRANSACTIONS, TRANSLATION AND
dependent on the use of a specific asset or assets and the BALANCES
arrangement conveys a right to use the asset. All foreign currency transactions are translated into the
functional currency, which is Nepalese Rupees, using
3.16.1 FINANCE LEASE the exchange rates prevailing at the dates when the
Agreements which transfer to counterparties substantially all transactions were affected.
the risks and rewards incidental to the ownership of assets,
but not necessarily legal title, are classified as finance lease. Monetary assets and liabilities denominated in foreign
When Bank is the lessor under finance lease, the amounts currencies at the reporting date are translated to Nepalese
due under the leases, after deduction of unearned interest Rupees using the spot foreign exchange rate ruling at that
income, are included in ‘Loans to & receivables from other date and all differences arising on non-trading activities are
customers’, as appropriate. Interest income receivable is taken to ‘Other Operating Income’ in the Statement of Profit
recognized in ‘Net interest income’ over the periods of the or Loss. The foreign currency gain or loss on monetary items
leases so as to give a constant rate of return on the net is the difference between amortized cost in the functional
investment in the leases. currency at the beginning of the period, adjusted for
effective interest and payments during the period, and the
When Bank is a lessee under finance leases, the leased amortized cost in foreign currency translated at the rates of
assets are capitalized and included in ‘Property, plant and exchange prevailing at the end of the reporting period.
equipment’ and the corresponding liability to the lessor Non-monetary items in a foreign currency that are

ANNUAL
246 REPORT 2023-24
measured in terms of historical cost are translated using the 3.21. SEGMENT REPORTING
exchange rates as at the dates of the initial transactions. An operating segment is a component of an entity:
Non-monetary items in foreign currency measured at fair
 that engages in business activities from which it may earn
value are translated using the exchange rates at the date
revenues and incur expenses (including revenues and
when the fair value was determined.
expenses relating to transactions with other components
of the same entity),
Foreign exchange differences arising on the settlement or
reporting of monetary items at rates different from those
 whose operating results are regularly reviewed by the
which were initially recorded are dealt with in the Statement
entity’s chief operating decision maker to make decisions
of Profit or Loss. However, foreign currency differences arising
about resources to be allocated to the segment and
on available-for-sale equity instruments are recognized in
assess its performance, and
other comprehensive income. Forward exchange contracts
are valued at the forward market rates ruling on the  for which discrete financial information is available.
reporting date. Not every part of an entity is necessarily an operating
segment or part of an operating segment. For example, a
3.18. FINANCIAL GUARANTEE AND LOAN COMMITMENT corporate headquarters or some functional departments
A financial guarantee contract is a contract that requires may not earn revenues or may earn revenues that are only
the issuer to make specified payments to reimburse the incidental to the activities of the entity and would not be
holder for a loss it incurs because a specified debtor fails to operating segments. For the purposes of this NFRS, an entity’s
make payment when due. Financial guarantee contracts post-employment benefit plans are not operating segments.
may have various legal forms, such as a guarantee, some
types of letter of credit, etc. Where the Bank has confirmed The bank has identified the key segments of business on
its intention to provide funds to a customer or on behalf of the basis of nature of operations that assists the Executive
a customer in the form of loans, overdrafts, etc. whether Committee of the Bank in decision making process and to
cancellable or not and the Bank had not made payments at allocate the resources. It will help the management to assess
the reporting date, those instruments are included in these the performance of the business segments. The business
financial statements as commitments. segments identified are Banking (including loan, deposit and
trade operations), Payment solutions (Cards), Remittance
and Treasury. All operations between the segments are
3.19. SHARE CAPITAL AND RESERVES
conducted on pre-determined transfer price. Treasury
Share capital and reserves are different classes of equity
department acts as the fund manager of the Bank.
claims. Equity claims are claims on the residual interest in the
assets of the entity after deducting all its liabilities. Changes
in equity during the reporting period comprise income 3.22. EMPLOYEE BONUS
and expenses recognized in the statement of financial Employee bonus shall be calculated at the rate of 10% of
performance; plus contributions from holders of equity Profit before bonus and tax.
claims, minus distributions to holders of equity claims.
3.23. DIVIDEND ON ORDINARY SHARES
3.20. EARNINGS PER SHARE Dividend on ordinary shares are recognized as a liability and
 Bank presents basic and diluted Earnings per share deducted from equity when they are approved by the Bank’s
(EPS) data for its ordinary shares. Basic EPS is calculated shareholders. Interim Dividend is deducted from equity when
by dividing the profit and loss attributable to ordinary they are declared and no longer at the discretion of the Bank.
equity holders of Bank by the weighted average number Dividend for the year that is approved after the reporting
of ordinary shares outstanding during the period. date is disclosed as an event after the reporting date.
Diluted EPS is determined by adjusting both the profit
and loss attributable to the ordinary equity holders 3.24. CASH FLOW STATEMENT
and the weighted average number of ordinary shares The cash flow statement has been prepared whereby
outstanding, for the effects of all dilutive potential ordinary gross cash receipts and gross cash payments of operating
shares, if any. activities, finance activities and investing activities have
been recognized.
 Earnings per share is calculated and presented in
consolidated statement of profit or loss.
3.25. COMPARATIVE FIGURES
Comparative reporting period figures have been restated/
reclassified wherever necessary by the standards/
regulations and/or for better presentation.

ANNUAL 247
REPORT 2023-24
 CASH AND CASH EQUIVALENT 4.1

GROUP BANK

CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Cash in Hand 3,553,655,561 3,797,711,214 3,553,655,561 3,797,711,214

Balances with BFis 2,416,194,715 7,773,602,721 2,406,065,528 4,766,124,918

Money at Call and Short Notice 4,477,985,884 - 4,477,985,884 2,990,244,347

Other 12,302,021,918 - 12,302,021,918 -

Cash and Cash Equivalent 22,749,858,078 11,571,313,935 22,739,728,891 11,554,080,479

Balance of Standing Deposit Facility (SDF) including its accrued interest receivable has been presented under “Other”
heading.

DUE FROM NEPAL RASTRA BANK 4.2

GROUP BANK

CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Statutory Balances with NRB 9,453,753,577 8,879,504,444 9,453,753,577 8,879,504,444

Securities Purchased Under Resale Agreement - - - -

Other Deposit and Receivable from NRB - - - -

Total 9,453,753,577 8,879,504,444 9,453,753,577 8,879,504,444

PLACEMENTS WITH BANK AND FINANCIAL INSTITUTIONS 4.3

GROUP BANK

CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Placement with domestic BFIs - - - -

Placement with foreign BFIs 6,562,120,179 5,011,346,934 6,562,120,179 5,011,346,934

Less: Allowances for impairment - - - -

Total 6,562,120,179 5,011,346,934 6,562,120,179 5,011,346,934

DERIVATIVE FINANCIAL INSTRUMENTS 4.4

GROUP BANK

CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Held for trading

Interest rate swap - - - -

Currency swap - - - -

Forward exchange contract 4,976,896 17,320,155 4,976,896 17,320,155

Others - - - -

Held for risk management

Interest rate swap - - - -

Currency swap - - - -

Forward exchange contract - - - -

Other - - - -

Total 4,976,896 17,320,155 4,976,896 17,320,155

ANNUAL
248 REPORT 2023-24
OTHER TRADING ASSETS 4.5

GROUP BANK

CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Treasury Bills - - - -
Government Bonds 18,998,790 121,209,048 18,998,790 121,209,048
NRB Bonds - - - -
Domestic Corporate Bonds - - - -
Equities 178,571,731 109,407,897 - -
Other - - - -
Total 197,570,521 230,616,945 18,998,790 121,209,048
Pledged - - - -
Non-pledged 197,570,521 230,616,945 18,998,790 121,209,048

Investment in Citizen Saving Bonds including accrued interest receivable have been presented under “Government Bonds”.

INFORMATION RELATING TO INVESTMENT IN QUOTED EQUITY MEASURED AT FAIR VALUE THROUGH STATEMENT OF PROFIT OR LOSS 4.5.1

GROUP BANK GROUP BANK

CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE
Asian Life Insurance Co. Limited 6,802,156 6,041,854 4,645,950 4,470,600 - - - -

9,698 Ordinary Share of Rs. 100 paid up

Chhimek Laghubitta Bikas Bank Limited 7,010,000 6,624,900 7,891,027 7,010,000 - - - -

7,361 Ordinary Share of Rs. 100 paid up

Global IME Bank Limited - - - 186 - - - -

1 Ordinary Share of Rs. 100 paid up

Himalaya Life Insuranace Co. Ltd, 397,488 306,544 638,494 397,488 - - - -

784 Ordinary Share of Rs. 100 paid up

Lumbini Bikas Bank Ltd. - - 1,954,079 2,065,000 - - - -

5,000 Ordinary Share of Rs. 100 paid up

Nabil Bank Ltd. 810,718 708,972 1,179,146 810,718 - - - -

1,353 Ordinary Share of Rs. 100 paid up

National Life Insurance Co. Ltd. 2,436,249 2,285,990 1,786,077 1,833,090 - - - -

2,842 Ordinary Share of Rs. 100 paid up

NMB 50 Mutual Fund 3,122,007 2,985,234 3,567,127 3,122,007 - - - -

297,334 Ordinary Share of Rs. 10 paid up

Nirdhan Utthan Laghubitta Bittiya Sanstha 6,284,475 5,848,259 8,794,301 6,284,475 - - - -

Limited

7,781 Ordinary Share of Rs. 100 paid up

Rasuwagadhi Hydropower Company LTD. - - 2,304,515 2,100,000 - - - -

7,000 Ordinary Share of Rs. 100 paid up

RBB Mutual Fund 1 808,000 816,000 1,000,000 808,000 - - - -

100,000 Ordinary Share of Rs. 10 paid up

RMDC Laghubitta Bittiya Sanstha Ltd. - - 2,838,820 2,325,000 - - - -

3,000 Ordinary Share of Rs. 100 paid up

Sanima Equity Fund 1,180,000 1,091,000 1,462,916 1,180,000 - - - -

100,000 units of Rs. 10 paid up

Sagarmatha Lumbini Insurance Co. Ltd. 3,125,144 3,037,406 3,140,058 3,125,144 - - - -

4,178 units of Rs. 100 paid up

Sunrise First Mutual Fund 2,227,080 2,080,350 2,369,841 2,227,080 - - - -

201,000 units of Rs. 10 paid up

ANNUAL 249
REPORT 2023-24
 Shine Resunga Development Bank Ltd. - - 1,848,136 1,920,000 - - - -

5,000 units of Rs. 100 paid up

Sanjen Jalavidhyut Co. Ltd. - - 2,303,120 2,078,300 - - - -

7,000 Ordinary Share of Rs. 100 paid up

Siddhartha Investment Growth Scheme 2 39,153,809 41,148,355 43,359,700 39,153,809 - - - -

4,335,970 units of Rs. 10 paid up

Synergy Power Development Ltd. - - 3,296,217 2,501,000 - - - -

5,000 Ordinary Share of Rs. 100 paid up

Surya Jyoti Life Insurance Company Limited 5,405,403 4,265,898 3,440,561 3,050,000 - - - -

5,000 Ordinary Share of Rs. 100 paid up - -

Sanima Large Cap Fund 446,000 464,500 500,000 446,000 - - - -

50,000 units of Rs. 10 paid up

Siddhartha Systematic Investment Scheme 44,975,005 48,550,000 22,722,530 22,500,000 - - - -

2,500,000 units of Rs. 10 paid up

CEBD Hydropower Development Co. Ltd. 2,596,139 2,897,500 - - - - - -

5,000 units of Rs. 100 paid up

Chirkhwa Hydropower Co. Ltd. 1,001,289 1,031,390 - - - - - -

1,700 units of Rs. 100 paid up

Citizen Life Insurance Co. Ltd. 2,427,928 2,723,000 - - - - - -

5,000 units of Rs. 100 paid up

IME Life Insurance Co. Ltd. 868,417 849,375 - - - - - -

1,875 units of Rs. 100 paid up

Kamana Sewa Bikas Bank Ltd. 5,286,931 5,957,952 - - - - - -

14,,322 units of Rs. 100 paid up

Machhapuchhre Bank Limited 1,393,203 1,133,000 - - - - - -

5,665 Ordinary Share of Rs. 100 paid up

Reliance Spinning Mills Limited 5,993,664 5,993,664 - - - - - -

6,572 Ordinary Share of Rs. 100 paid up

Muktinath Krishi Company Ltd. 2,758,585 3,197,000 - - - - - -

2,300 Ordinary Share of Rs. 100 paid up

NRN Infrastructure and Development Ltd. 3,297,024 3,366,000 - - - - - -

4,500 Ordinary Share of Rs. 100 paid up

Prabhu Insurance Ltd. 4,229,067 4,475,268 - - - - - -

5,418 Ordinary Share of Rs. 100 paid up

Reliable Nepal Life Insurance Ltd. 1,095,334 1,062,560 - - - - - -

2,320 Ordinary Share of Rs. 100 paid up

Sarbottam Cement Ltd. 4,249,757 4,032,500 - - - - - -

5,000 Ordinary Share of Rs. 100 paid up

Sworajgar Laghubitta Bitya Sanatha Ltd. 364,519 395,715 - - - - - -

465 Ordinary Share of Rs. 100 paid up

Sun Nepal Life Insurance Company Ltd. 3,149,079 3,335,721 - - - - - -

6,524 Ordinary Share of Rs. 100 paid up

Sonapur Mineral and Oil Ltd. 1,627,272 1,596,350 - - - - - -

3500 Ordinary Share of Rs. 100 paid up

Trisuli Jal Vidhyut Co. Ltd. 2,488,126 2,224,075 - - - - - -

4,475 Ordinary Share of Rs. 100 paid up

United IDI Mardi RB Hydropower Limited 5,254,539 5,160,000 - - - - - -

12,000 Ordinary Share of Rs. 100 paid up

Universal Power Co. Ltd. 3,360,378 2,885,400 - - - - - -

14,000 Ordinary Share of Rs. 100 paid up

Total 175,624,785 178,571,731 121,042,618 109,407,897

ANNUAL
250 REPORT 2023-24
LOAN AND ADVANCES TO B/FIS 4.6

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Loans to microfinance institutions 5,837,839,209 5,238,878,700 5,837,839,209 5,238,878,700

Other - - - -

Less: Allowances for impairment (70,014,717) (68,104,793) (70,014,717) (68,104,793)

Total 5,767,824,492 5,170,773,907 5,767,824,492 5,170,773,907

LOAN AND ADVANCES TO B/FIS 4.6.1

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Balance at 17 July 68,104,793 84,311,520 68,104,793 84,311,520

Impairment loss for the year: - -

Charge for the year 58,165,630 22,301,301 58,165,630 22,301,301

Recoveries/reversal (56,255,706) (38,508,029) (56,255,706) (38,508,029)

Amount written off - - - -

Balance at Ashadh end 70,014,717 68,104,793 70,014,717 68,104,793

LOANS AND ADVANCES TO CUSTOMERS 4.7

GROUP BANK

CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Loan and advances measured at amortized cost 201,436,321,449 188,894,380,209 201,424,440,730 188,884,587,806
Less: Impairment allowances
Collective impairment (3,016,169,513) (2,904,799,011) (3,016,169,513) (2,904,799,011)
Individual impairment (2,934,888,707) (1,997,046,561) (2,934,888,707) (1,997,046,561)
Net amount 195,485,263,229 183,992,534,636 195,473,382,509 183,982,742,234
Loan and advances measured at FVTPL - - - -
Total 195,485,263,229 183,992,534,636 195,473,382,509 183,982,742,234

ANALYSIS OF LOAN AND ADVANCES -BY PRODUCT 4.7.1

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Product
Long Term Loans 99,333,381,243 79,965,370,303 99,333,381,243 79,965,370,303
Personal 27,472,300,960 25,842,189,886 27,472,300,960 25,842,189,886
Business 23,942,284,733 14,421,589,435 23,942,284,733 14,421,589,435
Working Capital 47,918,795,549 39,701,590,981 47,918,795,549 39,701,590,981
Overdraft (Personal) 2,944,142,503 3,282,391,436 2,944,142,503 3,282,391,436
Cash Credit Loan 23,418,562,749 23,860,881,669 23,418,562,749 23,860,881,669
Trust Receipt/Import Loan 4,188,664,714 3,977,400,980 4,188,664,714 3,977,400,980
Short Term Working Capital/Demand Loan 30,485,914,599 38,214,851,709 30,485,914,599 38,214,851,709
Personal Residential Loans 11,945,904,395 8,816,061,316 11,945,904,395 8,816,061,316
Real Estate Loans 4,609,133,894 5,955,601,918 4,609,133,894 5,955,601,918
Margin Lending Loans 5,797,949,426 4,088,177,663 5,797,949,426 4,088,177,663
Hire Purchase Loans 4,458,066,807 4,911,316,636 4,458,066,807 4,911,316,636
Deprived Sector Loans 4,181,831,600 5,223,252,424 4,181,831,600 5,223,252,424
Bills Purchased 400,510,346 133,224,840 400,510,346 133,224,840

ANNUAL 251
REPORT 2023-24
 GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Staff loans 1,908,760,428 1,945,795,623 1,896,879,709 1,936,003,220
Other 7,763,498,744 8,520,053,693 7,763,498,744 8,520,053,693
Total 201,436,321,449 188,894,380,209 201,424,440,730 188,884,587,806

ANALYSIS OF LOAN AND ADVANCES - BY CURRENCY 4.7.2

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Nepalese rupee 199,939,376,448 187,642,695,390 199,927,495,729 187,632,902,987

Indian rupee - - - -

United State dollar 1,496,945,001 1,251,684,819 1,496,945,001 1,251,684,819

Great Britain pound - - - -

Euro - - - -

Japenese yen - - - -

Chinese yuan - - - -

Other - - - -

Total 201,436,321,449 188,894,380,209 201,424,440,730 188,884,587,806

ANALYSIS OF LOAN AND ADVANCES - BY COLLATERAL 4.7.3

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Secured

Movable/Immovable Assets 188,065,922,523 176,210,916,024 188,065,922,523 176,210,916,024

Gold and Silver - - - -

Guarantee of Domestic BFIs - - - -

Government Guarantee 152,122,796 150,581,118 152,122,796 150,581,118

Guarantee of International Rated Bank - - - -

Collateral of Export Document 3,406,388,932 4,476,185,056 3,406,388,932 4,476,185,056

Collateral of Fixed Deposit Receipt 1,825,037,561 2,207,222,384 1,825,037,561 2,207,222,384

Collateral of Governement Securities 4,050,000 4,050,000 4,050,000 4,050,000

Counter Guarantee - - - -

Personal Guarantee 977,540,937 1,199,191,546 965,660,218 1,189,399,145

Other Collateral 7,005,258,698 4,646,234,080 7,005,258,698 4,646,234,080

Subtotal 201,436,321,449 188,894,380,209 201,424,440,730 188,884,587,806

Unsecured - - - -

Grand Total 201,436,321,449 188,894,380,209 201,424,440,730 188,884,587,806

ALLOWANCES FOR IMPAIRMENT 4.7.4

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Specific allowances for impairment
Balance at Shrawan 1 1,997,046,561 1,111,963,045 1,997,046,561 1,111,963,045
Impairment Loss for the year: -
Charge for the Year 937,842,146 885,083,516 937,842,146 885,083,516
Recoveries/reversal During the Year - - - -

ANNUAL
252 REPORT 2023-24
 GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Write-offs - - - -

Exchange rate Variance on Foreign Currency

- - - -
impairment

Other Movement - - - -

Balance at Ashadh end 2,934,888,707 1,997,046,561 2,934,888,707 1,997,046,561

Collective allowances for impairment

Balance at Shrawan 1 2,904,799,011 2,586,114,624 2,904,799,011 2,586,114,624

Impairment Loss for the Year:

Charge/(reversal) for the Year 111,370,502 318,684,388 111,370,502 318,684,388

Exchange Rate variance on Foreign Currency

- - - -
impairment

Other Movement - - - -

Balance at Ashadh end 3,016,169,513 2,904,799,011 3,016,169,513 2,904,799,011

Total allowances for impairment 5,951,058,220 4,901,845,573 5,951,058,220 4,901,845,573

INVESTMENT SECURITIES 4.8

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Investment securities measured at amortized cost 41,156,479,751 56,443,791,516 41,072,503,751 56,307,315,516

Investment in equity measured at FVTOCI 7,013,206,218 6,285,075,676 6,906,455,661 6,173,160,518

Total 48,169,685,969 62,728,867,192 47,978,959,412 62,480,476,034

INVESTMENT SECURITIES MEASURED AT AMORTIZED COST 4.8.1

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Debt Securities 1,459,077,598 1,459,077,598 1,451,101,598 1,451,101,598
Government Bonds 37,030,535,066 37,211,061,584 37,030,535,066 37,211,061,584
Government Treasury Bills 2,590,867,088 17,645,152,334 2,590,867,088 17,645,152,334
Nepal Rastra Bank Bonds - - - -
Nepal Rastra Bank Deposits Instruments - - - -
Other 76,000,000 128,500,000 - -
Less: Specific Allowances for Impairment - - - -
Total 41,156,479,751 56,443,791,516 41,072,503,751 56,307,315,516

INVESTMENT IN EQUITY MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME 4.8.2

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Equity Instruments

Quoted Equity Securities 5,338,972,825 4,758,486,521 5,282,222,268 4,696,571,363

Unquoted equity securities 1,674,233,393 1,526,589,155 1,624,233,393 1,476,589,155

Total 7,013,206,218 6,285,075,676 6,906,455,661 6,173,160,518

ANNUAL 253
REPORT 2023-24
 INFORMATION RELATING TO INVESTMENT IN QUOTED EQUITY MEASURED AT FAIR VALUE THROUGH STATEMENT OF PROFIT OR LOSS 4.8.3

GROUP BANK GROUP BANK

CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE
Investment in quoted
equity measured at fair
value through Other
Comprehensive Income
Siddhartha Premier
87,095,304 1,818,704,838 87,095,304 1,646,542,292 87,095,304 1,818,704,838 87,095,304 1,646,542,292
Insurance Limited
2,115,019 Ordinary Share of
Rs.100 paid up
National Life Insurance
16,630,663 16,161,390 8,080,526 7,614,870 16,630,663 16,161,390 8,080,526 7,614,870
Company Limited
27,162 Ordinary Share of Rs.100
paid up
NLG Insurance Company
253,177 1,526,887 253,177 1,183,283 253,177 1,526,887 253,177 1,183,283
Limited
2,913 Promoter Share of Rs.100
paid up
Life Insurance Co. Nepal
55,758,404 61,204,156 55,758,404 66,183,910 55,758,404 61,204,156 55,758,404 66,183,910
Limited
42,562 Ordinary Share of
Rs.100 paid up
Butwal Power Company
68,539,904 45,857,370 68,539,904 48,889,874 68,539,904 45,857,370 68,539,904 48,889,874
Limited
147,927 Ordinary Share of
Rs.100 paid up
Nepal Lube oil Limited 1,080 655,292 1,080 540,009 1,080 655,292 1,080 540,009
2,586 Ordinary Share of Rs.100
paid up
Nepal Film Dev. Company
- - 569 18,326 - - 569 18,326
Limited
539 Ordinary Share of Rs.100
paid up
Ridi Hydropower
Development Company 34,194 67,056 22,394 56,862 34,194 67,056 22,394 56,862
Limited
352 Ordinary Share of Rs.100
paid up
Chilime Hydro Power Limited 148,219,339 126,123,810 148,219,339 132,337,339 148,219,339 126,123,810 148,219,339 132,337,339
271,234 Ordinary Share of
Rs.100 paid up
Sanima Mai Hydropower
92,424,889 71,572,032 88,468,255 64,324,935 92,424,889 71,572,032 88,468,255 64,324,935
Limited
210,816 Ordinary Share of
Rs.100 paid up
IGI Prudential Insurance
36,001,105 32,887,404 27,830,453 24,528,000 36,001,105 32,887,404 27,830,453 24,528,000
Limited
58,938 Ordinary Shares of Rs.
100 Paid up
Sagarmatha Lumbini
32,864,144 31,027,633 25,288,245 24,219,492 32,864,144 31,027,633 25,288,245 24,219,492
Insurance Company Limited
42,679 Ordinary Share of
Rs.100 paid up
Mero Microfinance Bittiya
30,403,015 329,282,128 34,378,500 193,908,000 30,403,015 329,282,128 34,378,500 193,908,000
Sanstha Limited

734,368 Promoter Share

of Rs.100 paid up & 24,414
Ordinary Share of Rs.100 paid
up

ANNUAL
254 REPORT 2023-24
 GROUP BANK GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE
Sana Kishan Bikas Laghubitta
39,480,000 235,991,231 39,480,000 168,542,416 39,480,000 235,991,231 39,480,000 168,542,416
Bittiya Sanstha Limited
418,470 Promoter Share of
Rs.100 paid up

National Microfinance Limited 14,249,834 86,568,040 14,249,834 61,192,754 14,249,834 86,568,040 14,249,834 61,192,754

93,308 Promoter Share of

Rs.100 paid up
Upper Tamakoshi
31,227,316 13,329,541 27,455,516 16,098,042 31,227,316 13,329,541 27,455,516 16,098,042
Hydropower Limited
75,436 Ordinary Share of
Rs.100 paid up
Global IME Samunat Scheme - - 48,358,815 44,099,237 - - 48,358,815 44,099,237

4,579,360 units of Rs.10 each

Laxmi Equity Fund 34,478,588 30,940,209 30,795,127 26,060,039 34,478,588 30,940,209 30,795,127 26,060,039

3,097,118 units of Rs.10 each

Nabil Equity Fund - - 55,322,892 44,433,440 - - 55,322,892 44,433,440

4,623,667 units of Rs.10 each

NIBL Pragati Fund - - 12,028,734 11,728,728 - - 12,028,734 11,728,728

1,207,902 units of Rs. 10 each

NMB Hybrid Fund -1 - - 33,309,116 34,411,187 - - 33,309,116 34,411,187

3,189,174 units of Rs 10 each

Sanima Equity Fund 122,503,469 97,072,860 118,981,977 100,847,697 122,503,469 97,072,860 118,981,977 100,847,697

8,897,604 units of Rs.10 each

Siddhartha Equity Fund 225,000,000 188,775,000 225,000,000 212,175,000 225,000,000 188,775,000 225,000,000 212,175,000

2,25,00,000 units of Rs. 10 each

NIC Asia Growth Fund 48,826,482 35,999,172 47,546,212 36,079,621 48,826,482 35,999,172 47,546,212 36,079,621

3,636,280 units of Rs.10 each

Citizen Mutual Fund 7,845,538 7,611,648 7,817,576 7,377,089 7,845,538 7,611,648 7,817,576 7,377,089

789,590 units of Rs.10 each

Siddhartha Investment &
210,000,000 199,290,000 210,000,000 189,630,000 210,000,000 199,290,000 210,000,000 189,630,000
Growth Scheme-2
21,000,000 units of Rs.10 each
Rasuwagadhi Hydropower
25,717,825 15,625,265 25,717,825 15,890,100 25,717,825 15,625,265 25,717,825 15,890,100
Company Limited
52,967 Ordinary Share of
Rs.100 paid up
Nabil Balanced Fund-2 53,725,540 39,458,610 52,470,478 37,230,952 53,725,540 39,458,610 52,470,478 37,230,952

4,384,290 units of Rs. 10 each

Citizen Mutual Fund-2 50,988,328 52,817,760 50,000,000 51,950,000 50,988,328 52,817,760 50,000,000 51,950,000

5,118,000 units of Rs.10 each

NIC Asia Balanced Fund 37,422,966 34,221,120 37,422,966 33,258,651 37,422,966 34,221,120 37,422,966 33,258,651

3,564,700 units of Rs.10 each

NMB 50 92,908,338 84,211,855 86,839,223 81,591,668 92,908,338 84,211,855 86,839,223 81,591,668

8,387,635 units of Rs.10 each

Sunrise First Mutual Fund 37,258,447 29,043,270 37,258,447 31,091,732 37,258,447 29,043,270 37,258,447 31,091,732

2,806,113 units of Rs.10 each

Himalayan Life Insurance
36,291,502 28,370,960 21,826,082 18,662,670 36,291,502 28,370,960 21,826,082 18,662,670
Limited

ANNUAL 255
REPORT 2023-24
 GROUP BANK GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE
72,560 Ordinary Share of
Rs.100 paid up
Surya Jyoti Life Insurance
42,273,071 33,510,705 31,904,462 29,706,390 42,273,071 33,510,705 31,904,462 29,706,390
Company Limited
77,950 Ordinary Share of
Rs.100 paid up
Laxmi Unnati Kosh 21,642,903 19,637,100 20,007,058 18,786,573 21,642,903 19,637,100 20,007,058 18,786,573

2,181,900 units of Rs.10 each

NIBL Samriddhi Fund-II 10,000,000 8,250,000 10,000,000 9,110,000 10,000,000 8,250,000 10,000,000 9,110,000

1,000,000 units of Rs.10 each

Kumari Equity Fund 10,724,826 10,482,066 10,000,000 10,170,000 10,724,826 10,482,066 10,000,000 10,170,000

1,085,100 units of Rs.10 each

Sanima Large Cap Fund 10,008,815 9,300,219 10,000,000 8,920,000 10,008,815 9,300,219 10,000,000 8,920,000

1,001,100 units of Rs.10 each

RBB Mutual Fund-1 10,000,000 8,160,000 10,000,000 8,080,000 10,000,000 8,160,000 10,000,000 8,080,000

1,000,000 units of Rs.10 each

Kumari Dhanabriddhi Yojana 10,010,000 9,679,670 10,010,000 10,050,040 10,010,000 9,679,670 10,010,000 10,050,040

1,001,000 units of Rs.10 each

Nabil Balanced Fund-3 166,700 130,026 166,700 126,192 166,700 130,026 166,700 126,192

16,670 units of Rs.10 each

Sanima Reliance Life

264,000,000 950,011,793 264,000,000 805,728,000 264,000,000 950,011,793 264,000,000 805,728,000
Insurance Limited

26,40,000 Promoter Shares of

Rs. 100 paid up

Nepal Infrastructure
100,000,000 235,449,176 100,000,000 163,864,000 100,000,000 235,449,176 100,000,000 163,864,000
Development Bank Limited

10,80,000 Promoter Share of

Rs. 100 paid up

Hydroelectricity Investment
and Development Company - - - 184 - - - 184
Limited

1 Ordinary Share of Rs.100

paid up

Global IME Lagubitta Bittiya

- - - 1,061 - - - 1,061
Sanstha Limited

1 Ordinary Share of Rs.100

paid up

Mirmire Laghubitta Bittiya

- - - 709 - - - 709
Sanstha Limited

1 Ordinary Share of Rs.100

paid up

Global IME Balanced Fund 1 5,000,000 4,550,000 5,000,000 4,670,000 5,000,000 4,550,000 5,000,000 4,670,000

500,000 units of Rs.10 each

NIBL Growth Fund 10,000,000 10,640,000 10,000,000 10,640,000 10,000,000 10,640,000 10,000,000 10,640,000

1,000,000 units of Rs.10 each

NMB Sulav Investment Fund 2 25,000,000 25,150,000 25,000,000 24,975,000 25,000,000 25,150,000 25,000,000 24,975,000

2,500,000 units of Rs.10 each

NIC Asia Flexi Cap Fund 20,000,000 18,500,000 20,000,000 20,340,000 20,000,000 18,500,000 20,000,000 20,340,000

ANNUAL
256 REPORT 2023-24
 GROUP BANK GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE
2,000,000 units of Rs.10 each
Nepal Life Insurance
7,823,933 8,208,559 - - 7,823,933 8,208,559 - -
Company Limited
13,261 Ordinary Share of
Rs.100 paid up
Shikhar Insurance Company
11,031,506 11,409,663 - - 11,031,506 11,409,663 - -
Limited
15,781 Ordinary Share of Rs.100
paid up
IME Life Insurance Company
14,001,636 14,063,838 - - 14,001,636 14,063,838 - -
Limited
31,046 Ordinary Share of
Rs.100 paid up
Neco Insurance Company
11,781,420 11,894,608 - - 11,781,420 11,894,608 - -
Limited
14,228 Ordinary Share of
Rs.100 paid up
Sun Nepal Life Insurance
4,062,386 4,344,005 - - 4,062,386 4,344,005 - -
Company Limited
8,496 Ordinary Share of Rs.100
paid up
Citizen Life Insurance
13,111,714 14,271,788 - - 13,111,714 14,271,788 - -
Company Limited
26,206 Ordinary Share of
Rs.100 paid up
Reliable Nepal Life Insurance
6,725,516 6,962,516 - - 6,725,516 6,962,516 - -
Company Limited
15,202 Ordinary Share of
Rs.100 paid up
Laxmi Value Fund II 5,000,000 4,620,000 - - 5,000,000 4,620,000 - -

500,000 units of Rs.10 each

NIBL Stable Fund 5,000,000 5,000,000 - - 5,000,000 5,000,000 - -

500,000 units of Rs.10 each

Himalayan 80-20 10,000,000 9,990,000 - - 10,000,000 9,990,000 - -

1,000,000 units of Rs.10 each

Kumari Sabal Yojana 5,000,000 5,000,000 - - 5,000,000 5,000,000 - -

500,000 units of Rs.10 each

Siddhartha Investment &
120,000,000 113,400,000 120,000,000 123,720,000 120,000,000 113,400,000 120,000,000 123,720,000
Growth Scheme-3
12,000,000 units of Rs.10 each
Siddhartha Investment &
61,915,159 56,750,558 60,053,500 61,915,159 - - - -
Growth Scheme-3
6,005,350 units of Rs.10 each

Sanima Growth Fund 15,000,000 15,210,000 15,000,000 14,985,000 15,000,000 15,210,000 15,000,000 14,985,000

1,500,000 units of Rs.10 each

2,465,428,979 5,338,972,825 2,446,958,689 4,758,486,521 2,403,513,821 5,282,222,268 2,386,905,189 4,696,571,363

Investment in unquoted
equity measured at fair
value through Other
Comprehensive Income

Credit Information Center

1,907,600 144,725,633 1,907,600 83,201,429 1,907,600 144,725,633 1,907,600 83,201,429
Limited

ANNUAL 257
REPORT 2023-24
 GROUP BANK GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE
211,064 Promotor Shares of
Rs.100 paid up

Nepal Clearing House Limited 191,247,104 302,433,194 179,402,600 245,374,515 191,247,104 302,433,194 179,402,600 245,374,515

1,286,895 Promotor Shares of

Rs.100 paid up
National Banking Training
1,834,860 7,581,070 1,834,860 7,272,835 1,834,860 7,581,070 1,834,860 7,272,835
Institute
18,349 Promotor Shares of
Rs.100 paid up
ICRA Nepal Limited 760,000 6,249,759 760,000 6,986,650 760,000 6,249,759 760,000 6,986,650
27,360 Promotor Shares of
Rs.100 paid up
Nepal Electronic Payment
- - 15,000,000 23,412,000 - - 15,000,000 23,412,000
System Limited
150,000 Promotor Shares of
Rs. 100 paid up
Prabhu Capital Limited 4,500,000 4,841,988 4,500,000 4,906,560 4,500,000 4,841,988 4,500,000 4,906,560
45,000 Promotor Shares of Rs.
100 paid up
SWIFT SC* 6,037,683 8,206,750 6,105,167 6,105,167 6,037,683 8,206,750 6,105,167 6,105,167

7 Shares

Avasar Equity Diversified Fund 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000

1,000,000 units of Rs.1000 each

Avasar Equity Diversified Fund 50,000,000 50,000,000 50,000,000 50,000,000 - - - -

50,000 shares of Rs.1000 each

Kumari Sunaulo Lagani

10,000,000 11,840,000 10,000,000 10,650,000 10,000,000 11,840,000 10,000,000 10,650,000
Yojana

1,000,000 units of Rs.10 each

Nabil Flexi Cap Fund 10,000,000 10,640,000 10,000,000 9,900,000 10,000,000 10,640,000 10,000,000 9,900,000

1,000,000 units of Rs.10 each

NIBL Sahabhagita Fund 2,500,000 2,635,000 2,500,000 2,670,000 2,500,000 2,635,000 2,500,000 2,670,000

250,000 units of Rs. 10 each

Siddhartha Systematic
90,395,000 97,100,000 45,445,000 45,000,000 90,395,000 97,100,000 45,445,000 45,000,000
Investment Scheme
10,000,000 units of Rs.10 each

NIC Asia Dynamic Debt Fund 1,000,000 1,109,000 1,000,000 1,110,000 1,000,000 1,109,000 1,000,000 1,110,000

100,000 units of Rs.10 each

Avasar Equity Limited 30,000,000 26,871,000 30,000,000 30,000,000 30,000,000 26,871,000 30,000,000 30,000,000

300,000 units of Rs.100 each

1,400,182,247 1,674,233,393 1,358,455,227 1,526,589,155 1,350,182,247 1,624,233,393 1,308,455,227 1,476,589,155

*The cost of SWIFT SC has increased due to foreign exchange revaluation.

ANNUAL
258 REPORT 2023-24
CURRENT TAX ASSETS 4.9

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Current tax assets
Current year income tax assets 1,510,804,353 1,204,657,980 1,482,181,274 1,176,720,237
Tax assets of prior periods 9,057,537,882 8,365,698,145 9,057,537,882 8,365,698,145

Current tax liabilities

Current year income tax liabilities (1,420,019,097) (1,424,265,088) (1,392,529,672) (1,399,891,181)
Tax liabilities of prior periods (8,929,349,137) (7,878,762,253) (8,929,349,137) (7,878,762,253)
Total 218,974,001 267,328,784 217,840,347 263,764,947

INVESTMENT IN SUBSIDIARIES 4.10

BANK
CURRENT YEAR PREVIOUS YEAR
Investment in quoted subsidiaries - -
Investment in unquoted subsidiaries 51,000,000 51,000,000
Total investment 51,000,000 51,000,000
Less: Impairment allowances - -
Net carrying amount 51,000,000 51,000,000

4.10.1: INVESTMENT IN QUOTED SUBSIDIARIES

The Bank has not made any Investment in Quoted Subsidiaries.

INVESTMENT IN UNQUOTED SUBSIDIARIES 4.10.2

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Siddhartha Capital Limited 51,000,000 Not Listed 51,000,000 Not Listed
10,20,000 Promotor Shares of Rs.100 each
Total 51,000,000 - 51,000,000 -

INFORMATION RELATING TO SUBSIDIARIES OF THE BANK 4.10.3

PERCENTAGE OF OWNERSHIP HELD BY THE BANK

CURRENT YEAR PREVIOUS YEAR
Siddhartha Capital Limited 51% 51%

ANNUAL 259
REPORT 2023-24
 NON CONTROLLING INTEREST OF THE SUBSIDIARIES 4.10.4

GROUP
CURRENT YEAR
Siddhartha Capital Limited

Equity interest held by NCI (%) 49%

Profit/(loss) allocated during the year 32,573,931

Accumulated balances of NCI as on 15 July 2024 227,215,655

Dividend paid to NCI 24,500,000

PREVIOUS YEAR
Siddhartha Capital Limited
Equity interest held by NCI (%) 49%
Profit/(loss) allocated during the year 30,567,592
Accumulated balances of NCI as on 16 July 2023 220,913,182
Dividend paid to NCI 24,500,000

INVESTMENT IN ASSOCIATES 4.11

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Investment in quoted associates - - - -
Investment in unquoted associates - - - -
Total Investment - - - -
Less: Impairment allowances - - - -
Net Carrying amount - - - -

The Bank has not made any Investment in Associates.

ANNUAL
260 REPORT 2023-24
 INVESTMENT IN QUOTED ASSOCIATES 4.11.1
GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE

…………………………………….Ltd.
- - - - - - - -
…………shares of Rs. …….each

…………………………………….Ltd.
- - - - - - - -
…………shares of Rs. …….each

Total - - - - - - - -

INVESTMENT IN UNQUOTED ASSOCIATES

4.11.2
GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE
…………………………………….Ltd.
- - - - - - - -
…………shares of Rs. …….each
…………………………………….Ltd.
- - - - - - - -
…………shares of Rs. …….each

Total - - - - - - - -

INFORMATION RELATING TO ASSOCIATES OF THE BANK

4.11.3
GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE
…………………………………….Ltd. - - - -
…………………………………….Ltd. - - - -
…………………………………….Ltd. - - - -
…………………………………….Ltd. - - - -

EQUITY VALUE OF ASSOCIATES 4.11.4

GROUP
CURRENT YEAR PREVIOUS YEAR
…………………………………….Ltd. - -
…………………………………….Ltd. - -

REPORT 2023-24
ANNUAL
Total - -

261
 INVESTMENT PROPERTIES 4.12

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Investment properties measured at fair value - - - -
Balance as on 17 July 2023 - - - -
Addition/disposal during the year - - - -
Net changes in fair value during the year - - - -
Adjustment/transfer - - - -
Net amount
Investment properties measured at cost
Balance as on 17 July 2023 654,537,489 213,307,612 654,537,489 213,307,612
Addition/disposal during the year 73,032,684 441,229,877 73,032,684 441,229,877
Adjustment/transfer - - - -
Accumulated depreciation - - - -
Accumulated impairment loss - - - -
Net amount 727,570,174 654,537,489 727,570,174 654,537,489
Total 727,570,174 654,537,489 727,570,174 654,537,489

ANNUAL
262 REPORT 2023-24
 PROPERTY AND EQUIPMENT
4.13
GROUP

PARTICULARS LEASEHOLD COMPUTER & FURNITURE & EQUIPMENT & TOTAL ASAR TOTAL ASAR
LAND BUILDING VEHICLES MACHINERY
PROPERTIES ACCESSORIES FIXTURE OTHERS END 2081 END 2080
Cost
As on 17 July 2022 362,764,564 253,261,998 2,755,249,293 372,768,717 151,683,259 187,914,448 - 537,684,651 4,621,326,931
Addition during the Year
Acquisition - - 499,576,651 33,035,945 3,500,000 30,825,904 - 108,936,037 675,874,537
Capitalization - 367,677,309 - - - - - - 367,677,309
Disposal during the year - (59,020) (8,973,242) (8,864,936) (1,984,600) (3,172,436) - (13,869,550) (36,923,782)
Adjustment/Revaluation - - 26,265,221 - - - - - 26,265,221
Balance as on 16 July 2023 362,764,564 620,880,287 3,272,117,924 396,939,726 153,198,659 215,567,917 - 632,751,139 5,654,220,216

Addition during the Year

Acquisition - - 32,587,441 27,778,921 19,832,900 16,396,551 - 67,900,946 164,496,758
Capitalization - 3,092,332 - - - - - - 3,092,332
Disposal during the year - - (3,459,578) (7,205,532) (5,730,795) (2,147,684) - (16,103,282) (34,646,871)
Adjustment/Revaluation - - 198,322,419 - - - - 198,322,419
Balance as on 15 July 2024 362,764,564 623,972,619 3,499,568,206 417,513,115 167,300,764 229,816,784 - 684,548,802 5,985,484,854

Depreciation and Impairment

As on 17 July 2022 - 23,266,641 1,100,551,848 228,672,680 74,511,008 108,510,799 - 350,570,720 1,886,083,696
Depreciation charge for the Year - 4,786,084 288,885,415 37,137,341 12,065,866 17,367,690 - 54,242,836 414,485,233
Impairment for the year - - - - - - - - -
Disposals - (23,917) (8,917,350) (8,699,768) (1,959,147) (2,873,459) - (13,700,257) (36,173,898)
Adjustment - - 7,216,531 - - - - - 7,216,531
As on 16 July 2023 - 28,028,808 1,387,736,445 257,110,253 84,617,728 123,005,029 - 391,113,299 2,271,611,562
Impairment for the year - - - - - - - - -
Depreciation charge for the Year - 12,192,135 292,537,708 36,038,966 12,948,746 20,113,442 - 64,999,548 438,830,544
Disposals - - (3,435,877) (7,185,844) (5,152,530) (2,131,138) - (16,011,867) (33,917,256)
Adjustment - - - - - - - - -
As on 15 July 2024 - 40,220,943 1,676,838,275 285,963,375 92,413,944 140,987,333 - 440,100,980 2,676,524,850
Capital Work in Progress - 210,626,370 1,274,980 - - - - - 211,901,350 196,907,224
Net Book Value
As on 16 July 2023 362,764,564 789,758,703 1,884,381,480 139,829,473 68,580,931 92,562,887 - 241,637,840 3,579,515,879
As on 15 July 2024 362,764,564 794,378,046 1,824,004,911 131,549,740 74,886,820 88,829,451 - 244,447,822 3,520,861,355

REPORT 2023-24
263ANNUAL
 264
ANNUAL
REPORT 2023-24
BANK

PARTICULARS LEASEHOLD COMPUTER & FURNITURE & EQUIPMENT & TOTAL ASAR TOTAL ASAR
LAND BUILDING VEHICLES MACHINERY
PROPERTIES ACCESSORIES FIXTURE OTHERS END 2081 END 2080
Cost
As on 17 July 2022 362,764,564 253,261,998 2,705,671,355 361,289,789 148,001,663 186,144,929 - 530,137,915 4,547,272,213
Addition during the Year
Acquisition - - 499,576,651 31,785,295 - 30,740,476 - 108,902,121 671,004,543
Capitalization - 367,677,309 - - - - - - 367,677,309
Disposal during the year (59,020) (8,973,242) (8,864,936) (1,984,600) (3,172,436) - (13,869,550) (36,923,782)
Adjustment/Revaluation* - - 26,265,221 - - - - - 26,265,221
Balance as on 16 July 2023 362,764,564 620,880,287 3,222,539,986 384,210,148 146,017,063 213,712,970 - 625,170,487 5,575,295,504
Addition during the Year
Acquisition - - 32,587,441 26,373,297 19,028,000 16,138,948 - 67,397,331 161,525,016
Capitalization - 3,092,332 - - - - - - 3,092,332
Disposal during the year - - (3,459,578) (7,205,532) (5,730,795) (2,147,684) - (15,878,282) (34,421,871)
Adjustment/Revaluation* - - 198,322,419 - - - - - 198,322,419
Balance as on 15 July 2024 362,764,564 623,972,619 3,449,990,267 403,377,913 159,314,268 227,704,234 - 676,689,535 5,903,813,401
Depreciation and Impairment
As on 17 July 2022 - 23,266,641 1,084,855,381 217,899,580 70,829,416 106,741,450 - 343,226,872 1,846,819,340
Depreciation charge for the Year - 4,786,084 281,082,910 36,848,914 12,007,533 17,365,910 - 54,159,957 406,251,308
Impairment for the year - - - - - - - - -
Disposals - (23,917) (8,917,350) (8,699,768) (1,959,147) (2,873,459) - (13,700,257) (36,173,898)
Adjustment - - 7,216,531 - - - - - 7,216,531
As on 16 July 2023 - 28,028,808 1,364,237,472 246,048,726 80,877,803 121,233,901 - 383,686,572 2,224,113,282
Impairment for the year - - - - - - - - -
Depreciation charge for the Year - 12,192,135 284,735,203 35,473,035 12,181,671 20,077,494 - 64,806,969 429,466,508
Disposals - - (3,435,877) (7,185,844) (5,152,530) (2,131,138) - (15,786,867) (33,692,256)
Adjustment - - - - - - - - -
As on 15 July 2024 - 40,220,943 1,645,536,799 274,335,918 87,906,944 139,180,257 - 432,706,674 2,619,887,534
Capital Work in Progress - 210,626,370 1,274,980 - - - - - 211,901,350 196,907,224

Net Book Value

As on 16 July 2023 362,764,564 780,336,029 1,867,725,187 138,161,422 65,139,260 92,479,069 - 241,483,914 3,548,089,447
As on 15 July 2024 362,764,564 794,378,046 1,805,728,449 129,041,995 71,407,324 88,523,977 - 243,982,861 3,495,827,216

* The Bank has transitioned from NAS 17 to NFRS 16 for accounting of leases. The adjustment of Right of Use lease assets have been disclosed under this heading. The written down value of RoU
lease assets as of July 15, 2024 is NPR 1,513,106,569. The depreciation expense for current year includes depreciation expense of RoU lease assets amounting to NPR 231,705,130.
 GOODWILL AND INTANGIBLE ASSETS 4.14

GROUP
SOFTWARE
PARTICULARS GOODWILL OTHER TOTAL ASAR END 2081 TOTAL ASAR END 2080
PURCHASED DEVELOPED
Cost
As on 17 July 2022 - 198,274,452 - - 198,274,452

Addition during the Year

Acquisition - 136,284,340 - - 136,284,340

Capitalization - - - - -
Disposal during the year - - - - -
Adjustment/Revaluation - - - - -
Balance as on 16 July 2023 - 334,558,792 - - 334,558,792
Addition during the Year
Acquisition - 29,262,710 - - 29,262,710
Capitalization - - - - -
Disposal during the year - - - - -
Adjustment/Revluation - - - - -
Balance as on 15 July 2024 - 363,821,502 - - 363,821,502

Amortization and Impairment

As on 17 July 2022 - 124,552,104 - - 124,552,104
Amortization charge for the Year - 42,394,380 - - 42,394,380
Impairment for the year - - - - -

Disposals - - - - -

Adjustment - - - - -
As on 16 July 2023 - 166,946,484 - - 166,946,484

Amortization charge for the Year - 49,378,818 - - 49,378,818

Impairment for the year - - - - -
Disposals - - - - -
Adjustment - - - - -
As on 15 July 2024 - 216,325,302 - - 216,325,302
Capital Work in Progress - - - - -
Net Book Value
As on 16 July 2023 - 167,612,308 - - 167,612,308

As on 15 July 2024 - 147,496,201 - - 147,496,201

REPORT 2023-24
265ANNUAL
 266
ANNUAL
BANK

REPORT 2023-24
SOFTWARE
PARTICULARS GOODWILL OTHER TOTAL ASAR END 2080 TOTAL ASAR END 2079
PURCHASED DEVELOPED

Cost
As on 17 July 2022 - 192,970,262 - - 192,970,262
Addition during the Year
Acquisition - 136,264,340 - - 136,264,340
Capitalization - - - - -
Disposal during the year - - - - -
Adjustment/Revaluation - - - - -
Balance as on 16 July 2023 - 329,234,603 - - 329,234,603
Addition during the Year
Acquisition - 28,829,390 - - 28,829,390
Capitalization - - - - -
Disposal during the year - - - - -
Adjustment/Revluation - - - - -
Balance as on 15 July 2024 - 358,063,993 - - 358,063,993
Amortization and Impairment
As on Shrawan 1, 2079 - 121,479,292 - - 121,479,292
Amortization charge for the Year - 41,755,028 - - 41,755,028
Impairment for the year - - - - -
Disposals -
Adjustment - - - - -
As on 16 July 2023 - 163,234,320 - - 163,234,320

Amortization charge for the Year - 48,683,071 - - 48,683,071

Impairment for the year - - - - -
Disposals - - - - -
Adjustment - - - - -
As on 15 July 2024 - 211,917,391 - - 211,917,391
Capital Work in Progress - - - - - -
Net Book Value
As on 16 July 2023 - 166,000,283 - - 166,000,283
As on 15 July 2024 - 146,146,602 - - 146,146,602
DEFERRED TAX 4.15

GROUP BANK
CURRENT YEAR CURRENT YEAR
NET DEFERRED NET DEFERRED
DEFERRED TAX DEFERRED TAX DEFERRED DEFERRED TAX
TAX ASSETS/ TAX ASSETS/
ASSETS LIABILITIES TAX ASSETS LIABILITIES
(LIABILITIES) (LIABILITIES)
Deferred tax on temporory
differences on following items
Loan and Advance to B/FIs - - - - - -

Loans and advances to customers - - - - - -

Investment properties - - - - - -

Investment securities - (935,294,606) (935,294,606) - (945,827,878) (945,827,878)

Property & equipment - (26,415,981.26) (26,415,981) - (22,411,912) (22,411,912)

Employees’ defined benefit plan 247,612,324 - 247,612,324 246,275,083 - 246,275,083

Lease liabilities 58,547,747 - 58,547,747 53,528,651 - 53,528,651

Provisions - - - - - -

Other temporary differences - (1,203,220) (1,203,220) - (1,203,220) (1,203,220)

Deferred tax on temporary
306,160,072 (962,913,807) (656,753,735) 299,803,735 (969,443,009) (669,639,275)
differences
Deferred tax on carry forward of
- - - - - -
unused tax losses
Deferred tax due to changes in tax
- - - - - -
rate
Net Deferred tax asset/(liabilities)
(656,753,735) (669,639,275)
as on year 15 July 2024
Recognised in profit or loss 190,205,725 178,311,068
Recognised in other comprehensive
(846,959,460) (847,950,343)
income
Recognised directly in equity - -
Deferred tax (asset)/liabilities as on 17
489,092,725 501,929,292
July 2023
Origination/(Reversal) during the
167,661,011 167,709,983
year
Deferred tax expense/(income)
(31,261,794) (32,762,202)
recognised in profit or loss
Deferred tax expense/(income)
recognised in other comprehensive 198,922,804 200,472,185
income

Deferred tax expense/(income)

- -
recognised in directly in equity

ANNUAL 267
REPORT 2023-24
 PREVIOUS YEAR PREVIOUS YEAR

NET
DEFERRED NET DEFERRED
DEFERRED DEFERRED DEFERRED TAX DEFERRED
TAX TAX ASSETS/
TAX ASSETS TAX ASSETS LIABILITIES TAX ASSETS/
LIABILITIES (LIABILITIES)
(LIABILITIES)
Deferred tax on temporory
differences on following items
Loan and Advance to B/FIs - - - - - -

Loans and advances to customers - - - - - -

Investment properties - - - - - -

Investment securities - (732,586,429) (732,586,429) - (743,340,030) (743,340,030)

Property & equipment - (27,495,015) (27,495,015) - (21,603,155) (21,603,155)

Employees’ defined benefit plan 228,086,069 - 228,086,069 227,103,580 - 227,103,580

Lease liabilities 42,902,651 - 42,902,651 35,910,314 - 35,910,314

Provisions - - - - - -

Other temporary differences - - - - - -

Deferred tax on temporary
270,988,719 (760,081,444) (489,092,725) 263,013,894 (764,943,186) (501,929,292)
differences
Deferred tax on carry forward of
- - - - - -
unused tax losses
Deferred tax due to changes in tax
- - - - - -
rate
Net Deferred tax asset/(liabilities)
(489,092,725) (501,929,292)
as of FY 2022-23
Recognised in profit or loss 109,256,938 95,861,873
Recognised in other comprehensive
(598,349,662) (597,791,165)
income
Recognised directly in equity - -
Deferred tax (asset)/liabilities as on
222,407,228 239,223,287
17 July 2022
Origination/(Reversal) during the
266,685,497 262,706,005
year
Deferred tax expense/(income)
(10,533,501) (13,954,496)
recognised in profit or loss
Deferred tax expense/(income)
recognised in other comprehensive 277,218,998 276,660,501
income
Deferred tax expense/(income)
- -
recognised in directly in equity

OTHER ASSETS 4.16

GROUP BANK

CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Assets held for sale - - - -

Other non banking assets - - - -
Bills receivable - - - -
Accounts receivable 976,905,739 634,967,969 976,899,155 634,962,740
Accrued income - - - -
Prepayments and deposit 106,042,346 125,636,281 83,898,611 105,566,018
Income tax deposit - - - -
Deferred employee expenditure 3,318,944,050 2,944,018,317 3,318,944,050 2,944,018,317
Other 344,516,662 369,247,460 323,546,606 365,694,044
Total 4,746,408,796 4,073,870,027 4,703,288,420 4,050,241,118

ANNUAL
268 REPORT 2023-24
DUE TO BANK AND FINANCIAL INSTITUTIONS 4.17

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Money market deposits - - - -

Interbank borrowing - 6,700,000,000 - 6,700,000,000

Other deposits from BFIs 3,578,162,810 4,913,657,572 3,578,162,810 4,913,657,572

Settlement and clearing accounts - - - -

Total 3,578,162,810 11,613,657,572 3,578,162,810 11,613,657,572

DUE TO NEPAL RASTRA BANK 4.18

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Refinance from NRB* 391,922,787 288,453,474 391,922,787 288,453,474
Standing Liquidity Facility - - - -
Lender of last report facility from NRB - - - -
Securities sold under repurchase
- - - -
agreements
Other payable to NRB - - - -
Total 391,922,787 288,453,474 391,922,787 288,453,474

* It includes refinance received under Sustainable Economic Development in Rural and Semi-Urban Areas – MSME Finance Phase II (SEDRA II) project which has been disclosed in
Note 5.26

DERIVATIVE FINANCIAL INSTRUMENTS 4.19

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Held for trading
Interest rate swap - - - -
Currency swap - - - -
Forward exchange contract 3,984,885 23,887,253 3,984,885 23,887,253
Others - - - -
Held for risk management
Interest rate swap - - - -
Currency swap - - - -
Forward exchange contract - - - -
Other - - - -
Total 3,984,885 23,887,253 3,984,885 23,887,253

DEPOSITS FROM CUSTOMERS 4.20

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Institutions customers
Term deposits 51,155,680,276 51,625,836,445 51,155,680,276 51,625,836,445
Call deposits 19,396,605,088 16,862,118,245 19,744,903,627 17,209,786,663
Current deposits 9,806,399,307 10,537,036,340 9,806,399,307 10,537,036,340
Other 708,135,199 979,802,001 708,135,199 979,802,001
Individual customers:
Term deposits 78,398,223,629 79,013,150,949 78,398,223,629 79,013,150,949
Saving deposits 76,713,937,246 59,144,364,609 76,713,937,246 59,144,364,609
Current deposits 2,935,939,605 3,126,446,889 2,935,939,605 3,126,446,889
Other 1,865,863,135 2,018,245,795 1,865,863,135 2,018,245,795
Total 240,980,783,485 223,307,001,273 241,329,082,024 223,654,669,691

ANNUAL 269
REPORT 2023-24
 CURRENCY WISE ANALYSIS OF DEPOSIT FROM CUSTOMERS 4.20.1

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Nepalese rupee 238,123,182,921 218,205,479,042 238,471,481,460 218,553,147,460
Indian rupee - - - -
United State dollar 2,502,398,499 4,734,322,343 2,502,398,499 4,734,322,343
Great Britain pound 319,233 1,041,674 319,233 1,041,674
Euro 12,145,629 15,115,813 12,145,629 15,115,813
Japenese yen 9,078,689 6,614,442 9,078,689 6,614,442
Chinese yuan - - - -
Australian dollar 14,903 2,683,951 14,903 2,683,951
United Arab Emirated Dirham - - - -
Swiss franc 333,630,166 341,726,893.55 333,630,166 341,726,894
Canadian dollar 13,445 17,113.64 13,445 17,114
Total 240,980,783,485 223,307,001,273 241,329,082,024 223,654,669,691

BORROWING 4.21

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Domestic Borrowing
Nepal Government - - - -
Other Institutions - - - -
Other - - - -
Sub total - - - -
Foreign Borrowing
Foreign Bank and Financial Institutions - - - -
Multilateral Development Banks 5,964,375,769 7,312,480,160 5,964,375,769 7,312,480,160
Other Institutions - - - -
Sub total 5,964,375,769 7,312,480,160 5,964,375,769 7,312,480,160
Total 5,964,375,769 7,312,480,160 5,964,375,769 7,312,480,160

PROVISIONS 4.22

GROUP BANK

CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Provisions for redundancy - - - -

Provision for restructuring - - - -

Pending legal issues and tax litigation - - - -

Onerous contracts - - - -

Other - - - -

Total - - - -

ANNUAL
270 REPORT 2023-24
MOVEMENT IN PROVISION 4.22.1

GROUP BANK

CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Balance at Sawan 1 - - - -

Provisions made during the year - - - -

Provisions used during the year - - - -

Provisions reversed during the year - - - -

Unwind of discount - - - -

Balance at Asar end - - - -

OTHER LIABILITIES 4.23

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Liability for employees defined benefit

264,198,600 293,508,627 264,198,600 293,508,627
obligations

Liability for long-service leave 561,175,814 466,778,269 556,718,344 463,503,306

Short-term employee benefits 5,842,102 6,290,018 4,483,320 4,725,589
Bills payable 31,296,338 48,674,480 31,296,338 48,674,480
Creditors and accruals 884,146,799 976,828,536 875,531,508 971,378,638
Interest payable on deposit 2,157,498 16,457,598 2,157,498 16,457,598
Interest payable on borrowing/debenture 526,921,450 529,161,798 526,921,450 529,161,798
Liabilities on defered grant income - - - -
Unpaid Dividend 98,760,180 90,034,441 98,760,180 90,034,441
Liabilities under Finance Lease - - - -
Employee bonus payable 507,851,387 517,250,705 497,307,329 507,250,999
Other
1. Lease liability as per NFRS 16 1,768,024,303 1,772,564,478 1,751,293,983 1,725,948,902
2. Others 1,381,447,631 1,224,028,032 1,063,728,930 936,214,732
Total 6,031,822,104 5,941,576,983 5,672,397,480 5,586,859,110

DEFINED BENEFIT OBLIGATIONS 4.23.1

The amounts recognised in the statement of financial position are as follows:

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Present value of unfunded obligations - - - -
Present value of funded obligations 1,273,758,224 1,108,760,356 1,273,758,224 1,108,760,356
Total present value of obligations 1,273,758,224 1,108,760,356 1,273,758,224 1,108,760,356
Fair value of plan assets 1,009,559,624 815,251,729 1,009,559,624 815,251,729
Present value of net obligations 264,198,600 293,508,627 264,198,600 293,508,627

Recognised liability for defined benefit

264,198,600 293,508,627 264,198,600 293,508,627
obligations

ANNUAL 271
REPORT 2023-24
 PLAN ASSETS 4.23.2

Plan assets comprise

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Equity securities - - - -
Government bonds - - - -
Bank deposit - - - -

Other 1,009,559,624 815,251,729 1,009,559,624 815,251,729

Total 1,009,559,624 815,251,729 1,009,559,624 815,251,729

Actual return on plan assets - - - -

MOVEMENT IN THE PRESENT VALUE OF DEFINED

4.23.3
BENEFIT OBLIGATIONS

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Defined benefit obligations at 17 July 2023 1,108,760,356 1,062,145,009 1,108,760,356 1,062,145,009
Actuarial losses/(gains) (84,521,692) (193,607,463) (84,521,692) (193,607,463)
Benefits paid by the plan (26,370,566) (20,921,367) (26,370,566) (20,921,367)
Current service costs and interest 275,890,126 261,144,177 275,890,126 261,144,177
Defined benefit obligations 15 July 2024 1,273,758,224 1,108,760,356 1,273,758,224 1,108,760,356

MOVEMENT IN THE FAIR VALUE OF PLAN ASSETS 4.23.4

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Fair value of plan assets at 17 July 2023 815,251,728 669,573,358 815,251,728 669,573,358
Contributions paid into the plan 220,678,461 166,599,738 220,678,461 166,599,738
Benefits paid during the year (26,370,566) (20,921,367) (26,370,566) (20,921,367)
Actuarial losses/(gains) 91,240,568 66,817,129 91,240,568 66,817,129
Expected return on plan assets (91,240,568) (66,817,129) (91,240,568) (66,817,129)
Fair value of plan assets at 15 July 2024 1,009,559,623 815,251,728 1,009,559,624 815,251,728

AMOUNT RECOGNISED IN PROFIT OR LOSS 4.23.5

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Current service costs 166,332,619 166,492,588 166,332,619 166,492,588
Interest on obligation 18,316,940 27,834,460 18,316,940 27,834,460
Expected return on plan assets - - - -
Total 184,649,559 194,327,048 184,649,559 194,327,048

AMOUNT RECOGNISED IN OTHER COMPREHENSIVE INCOME 4.23.6

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Acturial (gain)/loss 6,718,876 (126,790,334) 6,718,876 (126,790,334)
Total 6,718,876 (126,790,334) 6,718,876 (126,790,334)

ANNUAL
272 REPORT 2023-24
ACTUARIAL ASSUMPTIONS 4.23.7

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Discount rate 8% 10% 8% 10%
Expected return on plan asset 0% 0% 0% 0%
Future salary increase 7.50% 10% 7.50% 10%
Withdrawal rate 5% 5% 5% 5%

DEBT SECURITIES ISSUED 4.24

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Debt securities issued designated as at fair
- - - -
value through profit or loss
Debt securities issued at amortised cost 11,662,559,000 11,662,559,000 11,662,559,000 11,662,559,000
Total 11,662,559,000 11,662,559,000 11,662,559,000 11,662,559,000

SUBORDINATED LIABILITIES 4.25

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Redeemable preference shares - - - -

Irredemable cumulative preference shares

- - - -
(liabilities component)

Other - - - -
Total – – – –

SHARE CAPITAL 4.26

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Ordinary shares 14,089,980,190 14,089,980,190 14,089,980,190 14,089,980,190
Convertible preference shares (equity
- - - -
component only)
Irredemable preference shares (equity
- - - -
component only)
Perpetual debt (equity component only) - - - -
TOTAL 14,089,980,190 14,089,980,190 14,089,980,190 14,089,980,190

ORDINARY SHARES 4.26.1

BANK
CURRENT YEAR PREVIOUS YEAR
Authorized Capital

160,000,000 Ordinary shares of Rs. 100 each 16,000,000,000 16,000,000,000

Issued capital

140,899,801 Ordinary shares of Rs.100 each 14,089,980,190 14,089,980,190

Subscribed and paid up capital

140,899,801 Ordinary shares of Rs.100 each 14,089,980,190 14,089,980,190

Calls in Advance - -

Total 14,089,980,190 14,089,980,190

ANNUAL 273
REPORT 2023-24
 ORDINARY SHARE OWNERSHIP 4.26.2

BANK
CURRENT YEAR PREVIOUS YEAR
PERCENT AMOUNT PERCENT AMOUNT
Domestic ownership
Nepal Government - - - -
“A” class licensed institutions - - - -
Other licensed intitutions - - - -
Other Institutions - - - -
Public 49 6,904,090,293 49 6,904,090,293
Other 51 7,185,889,897 51 7,185,889,897
Foreign ownership - - - -
TOTAL 100 14,089,980,190 100 14,089,980,190

SHAREHOLDERS HOLDING 0.5% OR MORE SHARE 4.26.3

BANK

CURRENT YEAR PREVIOUS YEAR

NAME OF SHAREHOLDERS PERCENT AMOUNT PERCENT AMOUNT

Prudential Investment Company Pvt Ltd 3.23% 455,323,800 3.23% 455,323,800

Narendra Kumar Agrawal 2.95% 415,732,600 2.95% 415,732,600
Ratan Lal Kedia 2.48% 349,770,300 2.48% 349,770,300
Savita Kedia 1.92% 271,209,200 1.92% 271,209,200
Chiranji Lal Agrawal 1.81% 255,130,800 1.81% 255,130,800
Pawan Kumar Agrawal 1.76% 248,409,400 1.76% 248,409,400
Subodh Todi 1.55% 218,069,800 1.55% 218,369,900
Birendra Kumar Shah 1.54% 216,928,100 0.99% 139,155,500
Ashok Kumar Bahety 1.48% 208,090,100 1.49% 209,468,600
Narpat Singh Jain 1.45% 205,006,400 1.45% 205,006,400
Deena Nath Kedia 1.41% 198,159,700 1.41% 198,159,700
Aditya Kedia 1.39% 196,024,200 1.39% 196,024,200
Mahabir Investment Pvt Ltd 1.37% 192,799,700 1.37% 192,799,700
Tushar Todi 1.28% 180,171,500 1.28% 180,171,500
Suresh Kumar Rungta 1.21% 170,392,800 1.21% 170,392,800
Poonam Chand Agrawal 0.97% 137,344,200 0.97% 136,455,700
Binod Kumar Agrawal 0.94% 131,753,800 0.94% 131,753,800
Bharat Kumar Todi 0.87% 123,016,000 0.87% 123,016,000
Raj Kumar Tibrewala 0.81% 113,664,400 0.81% 113,664,400
Rajesh Kumar Kedia 0.78% 110,065,500 0.88% 123,764,100
Madan Lal Kedia 0.76% 107,387,300 1.08% 152,387,300
Rajendra Kumar Agrawal 0.76% 107,013,100 0.76% 107,113,100
Shyam Sunder Agrawal 0.75% 105,316,700 0.75% 105,316,700
Suresh Kumar Kedia 0.72% 101,230,000 0.72% 101,230,000
Keshari Chand Kucheria 0.67% 95,012,500 0.67% 95,012,500
Bimal Kumar Kedia 0.65% 91,635,400 0.66% 92,635,000
Shashi Kala Agrawal 0.63% 89,298,800 0.63% 89,298,800
Manish Jain 0.63% 88,997,700 0.63% 88,997,700
Jagdish Kumar Agrawal 0.61% 86,451,100 0.61% 86,451,100
Shambhu Kumar Kandoi 0.59% 83,288,100 0.59% 83,288,100

ANNUAL
274 REPORT 2023-24
 BANK

CURRENT YEAR PREVIOUS YEAR

NAME OF SHAREHOLDERS PERCENT AMOUNT PERCENT AMOUNT

Kavindra Bahadur Shrestha 0.59% 82,963,100 0.59% 82,963,100

Binay Kumar Shah Madwari 0.55% 78,153,900 0.77% 108,153,900
Saroj Sharma 0.54% 76,384,900 0.54% 76,384,900
Indira Rajbhandari 0.50% 70,384,800 0.50% 70,384,813

RESERVES 4.27

GROUP BANK

CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Statutory general reserve 5,067,148,064 4,442,777,281 5,030,176,187 4,409,195,752

Exchange equilisation reserve 98,384,933 69,888,596 98,384,933 69,888,596
Corporate social responsibility reserve 60,628,820 52,114,726 59,349,899 50,950,230
Capital redemption reserve 4,502,132,500 3,041,706,000 4,502,132,500 3,041,706,000
Regulatory reserve 1,640,179,755 1,386,118,237 1,640,179,755 1,386,118,237
Investment adjustment reserve 11,365,167 11,365,167 11,365,167 11,365,167
Capital reserve 51,000,000 51,000,000 - -
Assets revaluation reserve - - - -
Fair value reserve 2,205,752,565 1,735,124,683 2,206,931,715 1,734,460,071
Dividend equalisation reserve - - - -
Actuarial gain (228,380,916) (223,677,703) (228,380,916) (223,677,703)
Special reserve - - - -
Other reserve
1. Capital adjustment fund 19,427,832 19,427,832 19,427,832 19,427,832
2. Employee related reserve fund 59,384,594 53,566,155 59,384,594 53,566,155
Total 13,487,023,315 10,639,410,976 13,398,951,668 10,553,000,339

CONTINGENT LIABILITIES AND COMMITMENTS 4.28

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Contingent liabilities 26,710,460,699 27,959,594,032 25,467,931,091 27,844,594,032
Undrawn and undisbursed facilities 10,212,069,059 19,217,064,405 10,212,069,059 19,217,064,405
Capital commitment - 178,550,699 - 178,550,699
Lease Commitment - - - -
Litigation 288,274,503 371,613,313 288,274,503 363,202,850
TOTAL 37,210,804,262 47,726,822,450 35,968,274,654 47,603,411,987

ANNUAL 275
REPORT 2023-24
 CONTINGENT LIABILITIES 4.28.1
GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Acceptance and documentary credit 12,600,252,888 14,148,717,123 12,600,252,888 14,148,717,123
Bills for collection 666,933,407 672,609,716 666,933,407 672,609,716
Forward exchange contracts - - - -
Guarantees 12,200,744,796 13,023,267,193 12,200,744,796 13,023,267,193
Underwriting commitment 1,242,529,608 115,000,000 - -
Other commitments - - - -
Total 26,710,460,699 27,959,594,032 25,467,931,091 27,844,594,032

UNDRAWN AND UNDISBURSED FACILITIES 4.28.2

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Undisbursed amount of loans 3,357,543,271 13,195,439,041 3,357,543,271 13,195,439,041
Undrawn limits of overdrafts 4,694,936,568 4,217,953,784 4,694,936,568 4,217,953,784
Undrawn limits of credit cards 2,159,589,219 1,803,671,581 2,159,589,219 1,803,671,581
Undrawn limits of letter of credit - - - -
Undrawn limits of guarantee - - - -
Total 10,212,069,059 19,217,064,405 10,212,069,059 19,217,064,405

CAPITAL COMMITMENTS 4.28.3

Capital expenditure approved by relevant authority of the Bank but provision has not been made in financial statements.

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Capital commitments in relation to
Property and Equipment

Approved and contracted for - 176,520,466.08 - 176,520,466.08

Approved but not contracted for - 2,030,232.93 - 2,030,232.93
Sub total - 178,550,699 - 178,550,699

Capital commitments in relation to

Intangible assets
Approved and contracted for - - - -
Approved but not contracted for - - - -
Sub total - - - -
Total - 178,550,699 - 178,550,699

ANNUAL
276 REPORT 2023-24
LEASE COMMITMENTS 4.28.4

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Operating lease commitments

Future minimum lease payments under

non cancellable operating lease, where
the Bank is lessee

Not later than 1 year - - - -

Later than 1 year but not later than 5

- - - -
years

Later than 5 years - - - -

Sub total - - - -
Finance lease commitments

Future minimum lease payments under

non cancellable operating lease, where
the Bank is lessee

Not later than 1 year - - - -

Later than 1 year but not later than 5

- - - -
years

Later than 5 years - - - -

Sub total - - - -
Total - - - -

LITIGATION 4.28.5
GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR

Income Tax Litigation pertaining to

Siddhartha Bank Limited:

FY 2010-11 7,822,518 7,822,518 7,822,518 7,822,518

FY 2011-12 2,870,498 2,870,498 2,870,498 2,870,498
FY 2012-13 3,751,963 3,751,963 3,751,963 3,751,963
FY 2013-14 5,567,747 5,567,747 5,567,747 5,567,747
FY 2014-15 - 9,420,571 - 9,420,571
FY 2015-16 8,753,627 8,753,627 8,753,627 8,753,627
FY 2016-17 10,159,224 10,159,224 10,159,224 10,159,224
FY 2017-18 22,188,194 22,188,194 22,188,194 22,188,194
FY 2018-19 180,956,925 180,956,925 180,956,925 180,956,925
FY 2019-20 37,342,707 - 37,342,707 -
Sub total 279,413,402 251,491,266 279,413,402 251,491,266

Income Tax Litigation pertaining

to erstwhile Business Universal
Development Bank Ltd. (merged with the
Bank):

FY 2013-14 8,410,463 8,410,463 8,410,463 8,410,463

FY 2014-15 - 91,909,268 - 91,909,268

FY 2015-16 - 19,351,677 - 19,351,677

FY 2016-17 450,639 450,639 450,639 450,639

Sub total 8,861,102 120,122,047 8,861,102 120,122,047

Total 288,274,503 371,613,313 288,274,503 371,613,313

ANNUAL 277
REPORT 2023-24
 STATUS OF THE INCOME TAX LITIGATION CASES AS ON THE REPORTING DATE

INCOME TAX LITIGATION PERTAINING TO

STATUS
SIDDHARTHA BANK LIMITED:

Appeal filed in Supreme Court is withdrawn and petition filed in

FY 2010-11
Large Tax Payer’s Office for settlement

Appeal filed in Supreme Court is withdrawn and petition filed in Large Tax Payer’s
FY 2011-12
Office for settlement

FY 2012-13 Appeal filed in Supreme Court

Appeal filed in Supreme Court is withdrawn and petition filed in Large Tax Payer’s
FY 2013-14
Office for settlement

Appeal filed for Adminstrative Review in Inland Revenue

FY 2015-16
Department

Appeal filed for Adminstrative Review in Inland Revenue

FY 2016-17
Department

Appeal filed for Adminstrative Review in Inland Revenue

FY 2017-18
Department

Appeal filed for Adminstrative Review in Inland Revenue

FY 2018-19
Department

Appeal filed for Adminstrative Review in Inland Revenue

FY 2019-20
Department

INCOME TAX LITIGATION PERTAINING

TO ERSTWHILE BUSINESS UNIVERSAL
STATUS
DEVELOPMENT BANK LTD. (MERGED WITH
THE BANK):
FY 2012-13 Appeal filed in Supreme Court
Appeal filed in Revenue Tribunal is withdrawn and petition filed in Large Tax Payer’s
FY 2015-16
Office for settlement

INTEREST INCOME 4.29

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Cash and cash equivalent 101,451,187 75,337,582 101,451,187 75,337,582
Due from Nepal Rastra Bank - - - -
Placement with bank and financial
55,130,648 63,286,800 37,740,803 26,292,159
institutions
Loan and advances to bank and financial
- - - -
institutions
Loans and advances to customers 21,846,954,048 23,789,567,514 21,846,954,048 23,789,567,514
Investment securities 3,618,328,996 3,615,148,813 3,617,526,456 3,603,383,410
Loan and advances to staff 113,386,210 166,508,028 112,355,490 165,417,403
Other - - - -
Total 25,735,251,088 27,709,848,736 25,716,027,983 27,659,998,067

ANNUAL
278 REPORT 2023-24
INTEREST EXPENSE 4.30

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Due to bank and financial institutions - - - -
Due to Nepal Rastra Bank 46,852,412 725,028,919 46,852,412 725,028,919
Deposits from customers 15,490,743,028 17,016,000,913 15,503,999,790 17,026,855,021
Borrowing 925,498,514 451,515,097 925,498,514 451,515,097
Debt securities issued 1,168,318,695 1,168,318,695 1,168,318,695 1,168,318,695
Subordinated liabilities - - - -
Other 143,377,800 117,413,171 141,288,601 114,705,366
Total 17,774,790,449 19,478,276,795 17,785,958,012 19,486,423,098

Finance cost as per NFRS-16 (Leases) has been disclosed under “Other” heading of Interest expense.

FEES AND COMMISSION INCOME 4.31

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Loan administration fees 477,346,306 374,815,589 477,346,306 374,815,589
Service fees 162,248,948 132,539,094 86,018,181 79,636,863
Consortium fees - - - -
Commitment fees 6,107,761 6,950,532 6,107,761 6,950,532
DD/TT/Swift fees 29,940,265 29,441,395 29,940,265 29,441,395
Credit card/ATM issuance and renewal
464,671,889 373,059,083 464,671,889 373,059,083
fees
Prepayment and swap fees 21,291,503 6,454,228 21,291,503 6,454,228
Investment banking fees 3,771,357 16,618,378 - -
Asset management fees 62,388,276 47,607,172 - -
Brokerage fees 8,053,684 6,279,703 - -
Remittance fees 78,559,888 93,893,687 78,559,888 93,893,687
Commission on letter of credit 121,982,169 196,499,334 121,982,169 196,499,334
Commission on guarantee contracts
179,283,987 189,439,461 179,283,987 189,439,461
issued
Commission on share underwriting/issue - - - -
Locker rental 17,897,659 13,955,990 17,897,659 13,955,990
Other fees and commission income
1. ATM access fee 20,431,000 14,263,997 20,431,000 14,263,997
2. Agency Commission 37,709,896 51,229,061 37,709,896 51,229,061
3. Bills Purchased & Discounted
91,033,253 79,343,402 91,033,253 79,343,402
commission
4. Mobile Banking Annual Fee 158,375,000 134,994,294 158,375,000 134,994,294
5. Annual Fees-Prepaid Cards 3,737,500 3,322,450 3,737,500 3,322,450
6. E-com related income 5,186,500 2,713,375 5,186,500 2,713,375
7. Late payment fees 5,609 29,539,686 5,609 29,539,686
8. Other miscellaneous fees and
16,633,993 13,945,536 15,810,438 13,526,909
commission income
Total 1,966,656,444 1,816,905,447 1,815,388,806 1,693,079,336

ANNUAL 279
REPORT 2023-24
 FEES AND COMMISSION EXPENSE 4.32

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
ATM management fees 56,956,814 43,189,904 56,956,814 43,189,904
VISA/Master card fees 186,218,884 178,739,988 186,218,884 178,739,988
Guarantee commission - - - -
Brokerage - - - -
DD/TT/Swift fees 12,636,888 11,495,233 12,636,888 11,495,233
Remittance fees and commission 11,657,674 15,849,695 11,657,674 15,849,695
Other fees and commission expense
1. ECC transaction fee 18,581,480 19,316,337 18,581,480 19,316,337
2. Card related expenses 32,123,922 30,762,284 32,123,922 30,762,284
3. Subscriptions & membership fees 28,422,500 6,589,107 28,422,500 6,589,107
4. Branchless Banking related expenses 10,321,574 9,190,331 10,321,574 9,190,331
5. Bank charges 9,832,285 9,990,817 9,832,285 9,990,817
6. ASBA fees & charges 3,530,444 5,914,437 3,530,444 5,914,437
7. IPS transaction fees & charges 17,529,782 14,679,901 17,529,782 14,679,901
8. Other miscellaneous fees and
25,699,041 28,510,753 1,242,090 1,740,387
commission expenses
Total 413,511,287 374,228,787 389,054,337 347,458,421

NET TRADING INCOME 4.33

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Changes in fair value of trading assets 2,946,946 (2,992,278) - -
Gain/loss on disposal of trading assets - - - -
Interest income on trading assets 9,616,825 - 9,616,825 10,968,129
Dividend income on trading assets - - - -
Gain/loss foreign exchange transaction 230,228,040 191,737,335 230,227,768 191,735,761
Other - - - -
Total 242,791,810 188,745,057 239,844,593 202,703,890

OTHER OPERATING INCOME 4.34

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Foreign exchange revaluation gain 113,985,347 96,761,024 113,985,347 96,761,024
Gain/loss on sale of investment securities 30,332,584 - 30,332,584 -
Fair value gain/loss on investment
- - - -
properties
Dividend on equity instruments 121,350,980 127,916,600 145,575,980 147,805,630
Gain/loss on sale of property and
4,104,018 1,824,780 4,079,018 1,824,780
equipment
Gain/loss on sale of investment property 3,231,406 14,950,055 3,231,406 14,950,055
Operating lease income - - - -
Gain/loss on sale of gold and silver 13,442,864 13,911,115 13,442,864 13,911,115
Locker rent - - - -
Other
1. Rebate from Nostro Banks 10,981,049 15,864,074 10,981,049 15,864,074
2. Other miscellaneous operating
74,437,223 59,577,520 59,424,154 45,211,625
income
Total 371,865,471 330,805,167 381,052,402 336,328,302

ANNUAL
280 REPORT 2023-24
IMPAIRMENT CHARGE/(REVERSAL) FOR LOAN
4.35
AND OTHER LOSSES
GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Impairment charge/(reversal) on loan
1,909,924 (16,206,727) 1,909,924 (16,206,727)
and advances to B/FIs
Impairment charge/(reversal) on loan
1,049,212,647 1,203,767,904 1,049,212,647 1,203,767,904
and advances to customer
Impairment charge/(reversal) on
569 - 569 -
financial Investment
Impairment charge/(reversal) on
placement with banks and financial - - - -
institutions
Impairment charge/(reversal) on
- - - -
property and equipment
Impairment charge/(reversal) on goodwill
- - - -
and intangible assets
Impairment charge/(reversal) on
- - - -
investment properties
Total 1,051,123,141 1,187,561,177 1,051,123,141 1,187,561,177

PERSONNEL EXPENSE 4.36

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Salary 1,099,208,752 1,011,878,062 1,067,943,384 986,140,225
Allowances 837,229,311 785,856,276 833,934,157 783,167,714
Gratuity expense 186,178,399 226,423,351 184,649,558 224,223,822
Provident fund 107,666,406 99,169,144 105,830,420 97,701,087
Uniform 2,737,600 29,654,800 2,565,600 29,035,600
Training & development expense 47,260,799 28,888,964 47,260,799 28,888,964
Leave encashment 156,118,253 72,334,451 154,476,257 72,334,451
Medical 18,374,546 15,904,610 18,004,147 15,578,623
Insurance 23,024,128 19,667,052 22,579,623 19,285,068
Employees incentive - - - -
Cash-settled share-based payments - - - -
Pension expense - - - -
Finance expense under NFRS 38,074,043 84,076,843 37,787,872 83,790,181
Other expenses related to staff
1. Overtime expense 621,886 310,311 575,573 290,104
2. Staff recruitment expense 1,371,030 717,890 1,371,030 717,890
3. Others 3,968,732 4,164,657 3,615,470 3,831,101
Subtotal 2,521,833,886 2,379,046,410 2,480,593,890 2,344,984,829
Employees bonus 507,851,387 517,250,705 497,307,329 507,250,999
Total 3,029,685,273 2,896,297,115 2,977,901,219 2,852,235,828

ANNUAL 281
REPORT 2023-24
 OTHER OPERATING EXPENSE 4.37
GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Directors’ fee 1,466,000 1,688,000 1,466,000 1,688,000
Directors’ capacity development
7,187,654 149,271 7,187,654 149,271
expenses
Directors’ expense 3,258,879 2,449,453 3,258,879 2,449,453
Auditors’ remuneration 2,968,950 1,751,500 2,500,000 1,356,000
Other audit related expense 29,910 254,769 - 226,000
Professional and legal expense 5,688,635 4,160,541 5,363,635 3,728,041
Office administration expense 732,050,946 703,198,396 718,572,473 690,061,199
Operating lease expense* - - - -
Operating expense of investment
- - - -
properties
Corporate social responsibility expense** 24,000,618 - 24,000,618 -
Onerous lease provisions - - - -
Other
1. Outsourcing expenses (driver,
56,017,614 47,599,065 53,589,913 45,712,952
messenger & Others)
2. Fuel expenses 35,175,197 33,456,608 34,082,755 32,475,448
3. Share related expenses 2,072,557 5,934,068 2,072,557 5,934,068
4. Debenture related expenses 1,065,171 1,441,851 1,065,171 1,441,851
5. Rates & taxes 11,359,829 12,180,537 11,267,546 12,142,122
6. Software support expenses 47,592,841 49,051,813 47,592,841 49,051,813
7. Inaguration expenses - 4,021,825 - 4,021,825
8. Non capitalized items 5,787,767 6,119,642 5,787,767 6,119,642
9. Mobile banking expense 37,885,244 30,350,436 37,885,244 30,350,436
10. Rent 29,419,019 28,842,125 29,419,019 28,842,125
11. Other miscellaneous operating
1,047,635 1,656,921 516,114 1,692,740
expenses
Total 1,004,074,465 934,306,821 985,628,185 917,442,986

* Operting lease expense is nil as the total lease expense as per NFRS 16 is bifurcated into finance cost and depreciation. The
finance cost is included in Note 4.30 : Interest expense and depreciation expense is included in Note 4.38: Depreciation and
amortisation.

** Corporate social responsibility expense for previous year is nil as the expense was directly charged to Corporate Social
Responsibility Reserve. From this year, this has been reflected through Profit and Loss account and deducted from CSR
reserve later.

OFFICE ADMINSTRATION EXPENSE 4.37.1

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Water and electricity 57,155,342 52,653,437 56,165,146 51,776,670
Repair and maintenance - -
(a) Building 1,017,020 3,725,498 1,017,020 21,310
(b) Vehicle 7,916,611 7,375,649 7,916,611 7,375,649
(c) Computer and accessories 6,732,076 5,264,800 5,658,032 4,555,231
(d) Office equipment and furniture 7,129,456 7,233,908 7,129,456 7,233,908
(e) Other 18,611,676 16,163,554 17,751,816 19,312,914
Insurance 32,566,069 25,285,199 32,198,647 24,929,218
Postage, telex, telephone, fax 49,636,736 49,997,157 48,471,497 49,111,519
Printing and stationery 85,352,402 72,356,553 84,301,680 71,645,103
Newspaper, books and journals 737,058 1,148,707 685,725 1,102,382

ANNUAL
282 REPORT 2023-24
 GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Advertisement 23,818,862 37,147,710 21,891,480 32,619,995
Donations - - - -
Security expense 184,369,719 163,828,174 183,369,738 162,940,990
Deposit and loan guarantee premium 88,084,458 79,847,071 88,084,458 79,847,071
Travel allowance and expense 24,038,505 15,633,828 23,738,505 15,333,828
Entertainment - - - -
Annual/special general meeting expense 3,660,588 2,945,036 3,308,913 2,746,070
Other - -
1. Legal & Statutory Publication / Notice 1,481,857 1,860,294 1,481,857 1,860,294
2. Janitorial expenses 74,699,547 61,050,992 73,475,543 59,959,074
3. Business promotion and
48,140,686 84,901,362 48,051,339 84,859,702
development expense
4. Other office expenses 16,902,280 14,779,467 13,875,013 12,830,273
Total 732,050,946 703,198,396 718,572,473 690,061,199

DEPRECIATION & AMORTISATION 4.38

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Depreciation on property and equipment 438,830,544 414,485,233 429,466,508 406,251,308
Depreciation on investment property - - - -
Amortisation of intangible assets 49,378,818 42,394,380 48,683,071 41,755,028
Total 488,209,362 456,879,613 478,149,579 448,006,336

NON OPERATING INCOME 4.39

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Recovery of loan written off 11,264,646 13,471,787 11,264,646 13,471,787
Other income - - - -
Total 11,264,646 13,471,787 11,264,646 13,471,787

ANNUAL 283
REPORT 2023-24
 NON OPERATING EXPENSE 4.40

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Loan written off 7,565,195 1,174,376 7,565,195 1,174,376
Redundancy provision - - - -
Expense of restructuring - - - -
Other expense 12,432,803 100,020,165 12,432,803 100,020,165
Total 19,997,998 101,194,542 19,997,998 101,194,542
* Loss at the time of booking Investment Properties (Non-Banking Assets) have been shown under other expense heading

INCOME TAX EXPENSE 4.41

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Current tax expense
Current year 1,419,448,379 1,424,084,694 1,392,529,672 1,399,891,181
Adjustments for prior years 35,969,806 12,550,963 35,969,806 12,550,963
1,455,418,185 1,436,635,657 1,428,499,479 1,412,442,144
Deferred tax expense
Origination and reversal of temporary
(31,261,794) (10,533,501) (32,762,202) (13,954,496)
differences
Changes in tax rate - - - -
Recognition of previously unrecognised
- - - -
tax losses
Total 1,424,156,392 1,426,102,156 1,395,737,277 1,398,487,648

RECONCILIATION OF TAX EXPENSE AND ACCOUNTING PROFIT 4.41.1

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Profit before tax 4,546,437,485 4,655,256,344 4,475,765,961 4,565,258,995
Tax amount at tax rate of 30% 1,363,931,246 1,396,576,903 1,342,729,788 1,369,577,699
Add: Tax effect of expenses that are not
74,602,009 45,283,409 68,432,438 43,435,741
deductible for tax purpose
Less: Tax effect on exempt income (19,084,875) (13,170,260) (18,632,554) (13,122,258)
Add/less: Tax effect on other items 4,708,013 (2,587,897) 3,207,605 (1,403,533)
Total 1,424,156,392 1,426,102,156 1,395,737,277 1,398,487,648
Effective tax rate 31.32% 30.63% 31.18% 30.63%

ANNUAL
284 REPORT 2023-24
STATEMENT OF DISTRIBUTABLE PROFIT
FOR THE YEAR ENDED JULY 15, 2024 (AS PER NRB REGULATION)
Amount in NPR

BANK
CURRENT YEAR PREVIOUS YEAR
Net profit or (loss) as per statement of profit or loss 3,080,028,684 3,166,771,347
Appropriations:
a. General reserve (620,980,435) (633,354,269)
b. Foreign exchange fluctuation fund (28,496,337) (24,190,256)
c. Capital redemption reserve (1,460,426,500) (1,460,426,500)
d. Corporate social responsibility fund (6,799,669) (31,667,713)
e. Employees’ training fund (5,818,439) (21,371,100)
f. Other
i) Investment Adjustment Reserve - (6,105,167)

ii) Transfer of realised gain/(loss) up to previous year from fair value reserve (Net
of tax) on account of equities/mutual funds measured at fair value through OCI 24,873,494 -
which were sold/matured during the year

Profit or (loss) before regulatory adjustment 982,380,798 989,656,341

Regulatory adjustments:
a. Interest receivable (-)/previous accrued interest received (+) (120,898,518) (252,880,021)
b. Short loan loss provision in accounts (-)/reversal (+) - -
c. Short provision for possible losses on investment (-)/reversal (+) - -
d. Short loan loss provision on Non-Banking Assets (-)/reversal (+) (46,010,591) (277,974,823)
e. Deferred tax assets recognised (-)/ reversal (+) (82,449,195) (95,861,873)
f. Goodwill recognised (-)/ impairment of Goodwill (+) - -
g. Bargain purchase gain recognised (-)/reversal (+) - -
h. Actuarial loss recognised (-)/reversal (+) (4,703,213) 88,753,234
i. Other - -
Net Profit for the year ended July 15, 2024 available for distribution 728,319,280 451,692,858
Opening Retained Earning as on July 17, 2023 663,610,438 1,359,868,480

Adjustment (+/-) : Income tax deposited in accordance with section 27 of Finance

(218,379,935) -
Act, 2080*

Distribution:
Bonus shares issued - (1,065,553,357)
Cash dividend paid (593,188,166) (82,397,543)
Total Distributable profit or (loss) as on July 15, 2024 580,361,617 663,610,438
Annualised Distributable Profit/Loss per share 4.12 4.71

*The Bank has deposited NPR 218,379,935 in accordance with the provision of section 27 of Finance Act, 2080 related to
income tax liability arising from bargain purchase gain from merger of the entities and share premium collected from
auction of right shares. The deposited amount has been adjusted in opening retained earnings. Detail have been disclosed
under Note 5.25

ANNUAL 285
REPORT 2023-24
 5.DISCLOSURES AND ADDITIONAL INFORMATION
5.1 RISK MANAGEMENT and reviewed by the board level risk management
committee. Responsibility for the approval of risk appetite
5.1.1.(A) RISK MANAGEMENT FRAMEWORK rests with the board of directors.
All of the Bank’s activities involve, to varying degrees, the
analysis, evaluation, acceptance and management of 5.1.1 (C) STRESS TESTING
risks or combinations of risks. The Bank has placed high Stress Testing is a valuable risk management tool which
importance to identification, assessment and well thought tries to quantify the size of potential losses under certain
out handling of all the prominent risk that it faces or stress events. A stress event is an exceptional but credible
likely to face in execution of its activities. An established event to which a bank’s portfolio is exposed. As a part of its
risk governance framework ensures oversight of and risk measurement mechanism, the Bank puts an emphasis
accountability for the effective management of risk. It also on evaluating where the Bank stands under stressful market
provides for the compliance with Directive No. 5 of Unified conditions. It helps to provide information on the kinds of
Directives issued by Nepal Rastra Bank. conditions under which strategies or position, the Bank would
be most vulnerable and thus, strategies are devised such
Board and Board level committees ensures the strategies, that such circumstance doesn’t arise and/or to ensure least
policies and process are in line with the risk appetite and impact upon the Bank from such scenarios even if they do
tolerance limits for effective management of the risk. Risk occur.
Management Committee of the Bank periodically reviews
risk reports and then reports to the Board accordingly. Audit In conducting stress tests, the Bank gives special
Committee reviews the internal and external inspection consideration to instruments or markets where
reports, provides recommendations and feedback to the concentrations exist as such positions may be more
management regarding internal controls and compliance difficult to liquidate or offset in stressful situations. The Bank
issues as appropriate. Likewise, management level considers both historical market events as well as forward-
committees such as Executive Committee (EXCOM) and looking scenarios and also considers worst case scenarios
Asset Liability Management Committee (ALCO) are in place in addition to more probable events. Ad hoc scenarios are
for ensuring the risk within the Bank’s risk blanket. also prepared reflecting specific market conditions and
for particular concentrations of risk that arise within the
Over the past years, the Bank has focused to strengthen businesses. For example, interest rate sensitivity is measured
the risk management policies, procedure and systems. In in terms of exposure to a one basis point increase in
order to address the internal and external developments yields, whereas foreign exchange, commodity and equity
and challenges effectively, an independent Integrated Risk sensitivities are measured in terms of the underlying values
Management Department has been formed for overall or amounts involved.
risk management, with sufficient stature, independence,
resources and direct access to the Board level Committee. The stress testing methodology assumes that scope for
Integrated Risk Management Department serves as the management action would be limited during a stress event,
“Second Line” of defense in risk management/governance reflecting the decrease in market liquidity that often occurs.
framework of the Bank. It ensures the implementation of Stress scenarios are regularly updated to reflect changes in
the Bank’s risk management systems maintaining overall risk profile and economic events. The ALCO has responsibility
functioning and supervision of credit, operations and market for reviewing stress exposures and, where necessary,
risk departments and assesses the position of Compliance & enforcing reductions in overall market risk exposure. Regular
Legal Risk, Reputation Risk & Strategic Risk. It also monitors the stress test scenarios are applied to interest rates, credit
execution of risk management policies and procedures of spreads, exchange rates, commodity prices and equity
the Bank. Good Corporate Governance is an integral part of prices. This covers all asset classes in the financial markets,
the Bank to safeguard the interest of its stakeholders. banking and trading books. Besides, the design and results of
such stress tests are discussed in ALCO meeting and ensure
5.1.1 (B) RISK APPETITE AND TOLERANCE LIMITS that appropriate contingency plans are in place.
Risk appetite is defined as the level and nature of risk that
the Bank is willing to take for pursuing its mission on behalf The stress testing mechanism at SBL aims to address:
of its shareholders, subject to constraints imposed by
a) Concentration risk;
other stakeholders, such as debt holders, regulators, and
customers. It provides a framework for strategic decision
b) Illiquidity of markets in stressed market conditions;
making for the Bank. The Bank sets out the aggregated level
and risk types it accepts in order to achieve its business c) One way markets;
objectives in the Risk Management Policy of the Bank. The
Bank’s actual performance is reported against approved d) Event and jump to default risks;
risk profile and risk appetite, enabling senior management
to monitor the risk profile and guide business activity to e) Deep out of the money positions;
balance risk and return. This reporting allows risks to be
f) Positions subject to the gapping of prices; and
promptly identified and mitigated, and drives a strong risk
culture. The risk appetite is proposed by the management g) Other Risks

ANNUAL
286 REPORT 2023-24
The Bank’s stress tests are both of a quantitative and move in one particular risk driver, the source of the shock not
qualitative nature, incorporating both market risk and being identified, on the Bank’s financial condition. Likewise,
liquidity risk aspects of market disturbances. Quantitative scenario tests consider the impact of simultaneous moves in
criteria identify plausible stress scenarios to which bank a number of risk drivers, the stress event being well defined.
could be exposed. Qualitative criteria emphasizes that two
major goals of stress testing are to evaluate the capacity 5.1.2 (A). CREDIT RISK
of the Bank’s capital to absorb potential large losses and Credit risks are the risk associated with the probability of
to identify steps the Bank can take to reduce its risk and default of loan provided by the Bank. Bank is exposed to
conserve capital. This assessment is integral to setting and credit risk to a much larger extent as the Bank’s business is
evaluating the Bank’s strategy and the results of stress mainly concentrated on booking of risk assets. Hence, the
testing are routinely communicated to senior management credit risks comprises of the highest risk exposure of the
and, periodically, to the Risk Management Committee and Bank. Management of the credit risks largely signifies the risk
the Board. management of the Bank as whole.

The Bank carries out stress testing in two broad areas based It is measured as the amount which could be lost if a
on general scenarios and specific scenarios which are customer or counterparty fails to make repayments. In the
discussed below: case of derivatives, the measurement of exposure takes into
account the current mark to market value to the Bank of the
A. GENERAL SCENARIOS: contract and the expected potential change in that value
The Bank subjects its portfolios to a series of simulated stress over time caused by movements in market rates;
scenarios. The Bank stresses its portfolios with the shocks of
the magnitude experienced elsewhere, even when the Bank  It is monitored within limits, approved by individuals
has never been exposed to those in the past. within a framework of delegated authorities. These limits
represent the peak exposure or loss to which the Bank
The Bank has formulated stress testing framework where could be subjected should the customer or counterparty
various historical scenarios have been analyzed. The Bank fail to perform its contractual obligations;
carries out stress testing in line with the stress testing
 It is managed through a robust risk control framework
framework on a regular basis as prescribed by ALCO or NRB
which outlines clear and consistent policies, principles
guidelines issued from time to time.
and guidance for credit risk management.

(B) SPECIFIC SCENARIOS TO CAPTURE THE SPECIFIC CHARACTERISTICS

OF PORTFOLIO:
5.1.2(B).CREDIT RISK MANAGEMENT
Credit Risk is most prominent risk amongst the other
In addition to the above general scenarios, the Bank has also
associated risk for any Bank which is a probability of loss
developed its own stress tests which it identifies as most
due to a borrower’s failure to make payments. Credit Risk
adverse based on the characteristics of its portfolio. The
Management is a practice of loss mitigating procedure
results are reviewed periodically by Senior Management and
by understanding the adequacy of bank’s capital and
are reflected in the policies and limits set by management
loan loss reserves at a given point of time. In order to
and the Board of Directors.
prudently manage the credit risk of the Bank during day
to day functioning, the Bank adapts various risk mitigation
Stress test scenarios are continually reviewed and updated
measures.
to respond to changes in positions and economic events.
The Finance Department assess the likely impact of interest
The bank’s objective in credit risk management is to
rate movement and duration on existing portfolio as well as
minimize the risk and maximize the risk adjusted rate of
on fresh investment and the same is discussed in the ALCO
return by onboarding and maintaining risk assets within
meeting along with each fresh investment proposal.
the acceptable parameters. The Bank has its own credit
policy and credit related policies to manage the Credit
RESULTS OF STRESS TESTING
Risk Management philosophy that involves a continual
The result of stress testing is communicated to Assets Liability
measurement of probability of default/loss; identification
Committee (ALCO) as well as Risk Management Committee
of possible risks and mitigations. In order to manage
(RMC) on regular basis. The same is also discussed in detail
and eliminate the credit risk, the Bank has a practice of
with the Board of Directors. The report of stress testing is also
maintaining the best quality assets in its book. The Bank’s
shared with Nepal Rastra Bank as per the requirement of
credit policy elaborates detailed procedures for proper risk
Unified Directives issued by Nepal Rastra Bank.
management. The Bank has delegated credit approval limits
to various officials to approve and sanction various amount
SCENARIO ANALYSIS AND SENSITIVITY ANALYSIS of credit request based on their individual expertise and
Scenario analysis and sensitivity analysis is conducted risk judgment capability. The Bank makes credit extension
through the model developed by Bank Supervision decision by assessing each business proposal thoroughly.
Department, Nepal Rastra Bank. However, on need basis, the The credit application exceeding certain limit requires to
Bank also adopts other advanced techniques and develops be reviewed by Credit Risk Department (CRD) which act as
other scenarios. The Bank uses both scenario analysis and an independent control center in credit approval process
sensitivity analysis to conduct various stress simulations performing independent review of credit proposals. It also
and its probable impact on risks and capital adequacy ratio. ensures that the inherent credit risks that associated with the
Sensitivity analysis is carried out to assess the impact of a

ANNUAL 287
REPORT 2023-24
 business are addressed appropriately through coverage of  To cover losses which have been incurred but have
better safety margin, additional collateral back up and lower not yet been identified on loans subject to individual
exposure to keep the business at low leverage. assessment; and

Bank has standardized Product Papers, guidelines, procedure  For homogeneous groups of loans those are not
in place for proper governance for all credit relationship. The considered individually significant.
provisions of Capital Adequacy Framework - 2015 have been
complied in line to line basis to overcome the Credit Risk. INCURRED BUT NOT YET IDENTIFIED IMPAIRMENT
Individually assessed financial assets for which no evidence
As a check and balance mechanism, each credit case of loss has been specifically identified on an individual
requires at least dual approval. Regular monitoring of the basis are grouped together according to their credit risk
credit portfolio based on Sector, Product, NPA etc., ensures characteristics for the purpose of calculating an estimated
that the Bank does not run the risk of concentration of collective loss. This reflects impairment losses that the Bank
portfolio in a particular business sector a single borrower, has incurred as a result of events occurring before the
or products. Similarly the Bank also exercises controlled reporting date, which the Bank is not able to identify on an
investment policy with adequately equipped resource individual loan basis and that can be reliably estimated.
looking after the investment decisions. These losses will only be individually identified in the future.
The Bank has separate Central Credit Administration and As soon as information becomes available which identifies
Control Department (CCAC), which prepares security losses on individual financial assets within the group, those
documents and retains custody of same. This is a four financial assets are removed from the group and assessed
eyes concept in verifying the security aspects in line with on an individual basis for impairment.
the approved conditions. CCAC is also independent to
business division and it ensures, on an ongoing basis, on the The collective impairment allowance is determined after
safety and going concern of the borrowers, through post taking into account:
relationship assessment. Periodic review of all accounts
under credit exposure is one of the prudent practices that  Historical Loss Experience in portfolios of similar credit risk;
the Bank follows in order to take necessary steps to mitigate and
the risk.
 Management’s experienced judgment as to whether
current economic and credit conditions are such that
5.1.2(C). IMPAIRMENT ASSESSMENT
the actual level of inherent losses at the reporting date is
AND CREDIT RISK MITIGATION
like to be greater or less than that suggested by historical
The Bank creates impairment allowances for impaired loans
experience.
promptly and appropriately.

HOMOGENEOUS GROUPS OF FINANCIALS ASSETS

IMPAIRMENT ASSESSMENT METHODOLOGY
Statistical methods are used to determine impairment
A. IMPAIRMENT OF FINANCIAL ASSETS CARRIED AT AMORTIZED COST
losses on a collective basis for homogenous groups of
The Bank first assesses individually whether objective
financial assets. Losses in these groups of financial assets
evidence of impairment exists for financial assets that are
are recorded on an individual basis when individual financial
individually significant. When an account is classified as
assets are written off, at which point they are removed from
default or when the Bank no longer expect to recover the
the group.
principle or interest due on a loan in full or in accordance
with the original terms and conditions, it is assessed for
Bank uses the following method to calculate historical loss
impairment. If exposures are secured, the current net
experience on collective basis:
realizable value of the collateral will be taken into account
when assessing the need for an impairment allowance.
After grouping of loans on the basis of homogeneous risks,
When the net present value of the collateral is sufficiently
the Bank uses net flow rate method. Under this methodology,
adequate to cover the outstanding facilities, impairment is
the movement in the outstanding balance of customers
not calculated for such cases.
into default categories over the periods is used to estimate
the amount of financial assets that will eventually be
In the event Bank determines that no objective evidence of
irrecoverable, as a result of the events occurring before the
impairment exists for an individually assessed financial asset,
reporting date which the Bank is not able to identify on an
it includes the asset in a group of financial assets with similar
individual loan basis.
credit risk characteristics such as collateral type, past due
status and other relevant factors and collectively assesses
Under this methodology, loans are grouped into ranges
them for impairment. However, assets that are individually
according to the number of days in arrears and statistical
assessed for impairment and for which an impairment loss is
analysis is used to estimate the likelihood that loans in
or continues to be recognized are not included in a collective
each range will progress through the various stages of
assessment of impairment.
delinquency and ultimately prove irrecoverable.
Impairment is assessed on a collective basis in two
Current economic conditions and portfolio risk factors are
circumstances:
also evaluated when calculating the appropriate level of
allowance required to cover inherent loss. These additional
macro and portfolio risk factors may include:

ANNUAL
288 REPORT 2023-24
 Recent loan portfolio growth and product mix iii) As per the impairment testing conducted as per Pt. (ii),
 Unemployment rates no loans and advances were identified as individually
impaired in FY 2022-23 as well as FY 2023-24.
 Gross Domestic Production (GDP)Growth
iv) All loans and advances were then grouped into
 Inflation
homogenous types such as home loans, working
 Interest rates capital loans, term loans, etc. to calculate collective
impairment.
 Changes in government laws and regulations
V) Collective impairment was calculated following
 Property prices net flow rate method. Under this methodology, the
movements in the outstanding balance of customers
 Payment status
into default categories over the periods are used
to estimate the amount of financial assets that will
But, the amount of provision to be created against Loans and
eventually be irrecoverable, as a result of the events
Advances shall be higher of the following two amounts:
occurring before the reporting date which the Bank is
not able to identify on an individual loan basis.
 Impairment calculated as per Impairment Assessment
Methodology as described in Point 5.1.2.c above or,
Vi) Collective impairment as per the method mentioned in
 Loan Loss Provision calculated as per the provisions of
Point (v) in FY 2022-23 and FY 2023-24 is shown below:
Directive No. 2, Unified Directives, 2080.
Amount (NPR)
IMPAIRMENT CALCULATION BY FOLLOWING THE METHODOLOGY
PARTICULARS 2022-23 2023-24
DESCRIBED IN PT. 5.1.2.C ABOVE
Total Collective
i) Firstly, top borrowers constituting 25% (approximately) 747,390,433 544,364,312
Impairment
of total funded exposure of the Bank is subjected to
Individual Impairment Testing in each financial year i.e. FY
WRITE OFF OF LOANS AND RECEIVABLES
2022-23 and FY 2023-24.
Loans (and the related impairment allowance) are normally
ii) Loans and advances as filtered out following point-(i) written off, either partially or in full, when there is no realistic
were tested for individual impairment including following prospect of recovery. Where loans are secured, this is
criteria but not limited to: generally after receipt of any proceeds from the realization
of security. In circumstances where the realizable value
 Known Cash Flow difficulties experienced by the of any collateral has been determined and there is no
borrowers: reasonable expectation of further recovery, write off may
be earlier. During FY 2023-24, the Bank has written off loans
 Past due contractual payments of either principal or amounting to NPR 7,565,195 related to 4 parties. The list of
interest; such parties along with written off amount is mentioned
below:
 Breach of loan covenants or conditions;

 The probability that the borrower will enter bankruptcy or WRITTEN OFF AMOUNT
SN NAME OF THE BORROWER
other financial reorganization; and (NPR)
1 Arun Kumar Marwari 3,092,270
 A significant downgrading in credit rating by an external
credit rating agency. 2 Santosh Khadka 2,288,923
3 Ramesh Kumar Jatiya 2,081,270
 Bank’s aggregate exposure to the customer;
4 S.K. Media 102,732
 The viability of the customer’s business model and their Total 7,565,195
capacity to trade successfully out of financial difficulties
and generate sufficient cash flows to service debt  Collateral Management
obligations; The Bank seeks to use collateral, where possible, to
mitigate its risks on financial assets. The collateral comes
 The amount and timing of expected receipts and in various forms such as cash, securities, letters of credit/
recoveries; guarantees, real estate, receivables, inventories, other non-
financial assets and credit enhancements such as netting
 The extent of other creditors ‘commitments ranking ahead
agreements. The fair value of collateral is generally assessed,
of, or pari-pasu with the Bank and the likelihood of other
at a minimum, at inception and based on the guidelines
creditors continuing to support the company;
issued by the Nepal Rastra Bank. Non-financial collateral,
 The realizable value of security and likelihood of successful such as real estate, is valued based on data provided by
repossession; third parties such as independent valuator and audited
financial statements.

ANNUAL 289
REPORT 2023-24
 CREDIT RISK MITIGANTS AVAILED UNDER CRM LIQUIDITY RISK IS:
Types of eligible credit risk mitigants used and the benefits  Measured using maturity ladder analysis
availed under CRM as at July 15, 2024 are as follows:
 Monitored against the Bank’s liquidity risk management
framework and overseen by Asset and Liability
ELIGIBLE CRM Management Committee.
PARTICULARS
(NPR ‘000)
 Managed on a stand-alone basis with no reliance on
Deposit with Banks 2,635,121 any related party or the Nepal Rastra Bank, unless this
Deposit with Other Banks/FIs - represents routine established business as usual market
practice.
Total 2,635,121

5.1.3 (B) MANAGEMENT OF LIQUIDITY RISK

B. IMPAIRMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OCI
The board has ensured that the Bank has necessary
For financial assets at fair value through OCI, Bank assesses
liquidity risk management framework and bank is capable
at each reporting date whether there is objective evidence
of confronting uneven liquidity scenarios. The bank has
that an investment is impaired.
formulated liquidity policies, contingency funding planning
which are recommended by senior management/ALCO and
In the case of debt instruments, Bank assesses individually
approved by the Board of Directors. The bank utilizes flow
whether there is objective evidence of impairment based
measures to determine its cash position. A maturity ladder
on the same criteria as financial assets carried at amortized
analysis estimates a bank’s inflows and outflows and thus net
cost. However, the amount recorded for impairment is
deficit or surplus (GAP) over a time horizon. A maturity ladder
the cumulative loss measured as the difference between
is a useful device to compare cash inflows and outflows
the amortized cost and the current fair value, less any
both on a day-to-day basis and over a series of specified
impairment loss on that investment previously recognized
time periods as presented in the NRB Ni.Fa.No.5.1 under NRB
in the Statement of Profit or Loss. Future interest income
Directives No. 5.
is based on the reduced carrying amount and is accrued
using the rate of interest used to discount the future cash
Liquidity of the Bank is assessed, measured and maintained
flows for the purpose of measuring the impairment loss. If,
by Treasury Department by ensuring minimal compliance
in a subsequent period, the fair value of a debt instrument
with Nepal Rastra Bank prescribed ratios such as CRR, SLR,
increases and the increase can be objectively related to
and Credit to Capital and Deposit Ratio and Liquidity Ratio.
a credit event occurring after the impairment loss was
The department also maintains investments over and above
recognized, the impairment loss is reversed through the
the prescribed limit to cope up with the unprecedented
Statement of Profit or Loss.
liquidity risks that the Bank is ever exposed to.

In the case of equity investments classified as financial

5.1.4.(A) MARKET RISK
assets at fair value through OCI, objective evidence would
Market risks are the risk of losses in on-balance sheet
also include a ‘significant’ or ‘prolonged’ decline in the
and off-balance sheet positions arising from adverse
fair value of the investment below its cost. Where there is
movements in market prices. The major constituents of
evidence of impairment, the cumulative loss measured as
market risks are:
the difference between the acquisition cost and the current
fair value, less any impairment loss on that investment
 The risks pertaining to interest rate related instruments;
previously recognized in Statement of Profit or Loss is
removed from equity and recognized in the Statement of
 Foreign exchange risk (including gold positions)
Profit or Loss. However, any subsequent increase in the fair
throughout the Bank; and
value of an impaired equity security that has been classified
as financial assets at fair value through OCI is recognized  The risks pertaining to investment in equities and
in other comprehensive income. Bank writes-off certain commodities.
financial assets at fair value through OCI when they are
determined to be uncollectible.  The risk pertaining to concentration and correlation
factors in market transactions
5.1.3 (A) LIQUIDITY RISK
Liquidity risk is the potential for loss to a bank arising from 5.1.4.B. MANAGEMENT OF MARKET RISK
either its inability to meet its obligations or to fund increases The Board of Directors of the Bank approved the Market Risk
in assets as they fall due without incurring unacceptable cost management policy and framework of the Bank. As for the
or losses. Liquidity is the ability of an institution to transform management and monitoring of market and liquidity risk,
its assets into cash or its equivalent in a timely manner at a the Bank has an active Assets and Liability Management
reasonable price to meet its commitments as they fall due. Committee (ALCO) in place which meets regularly and takes
Liquidity risk is considered a major risk for banks. It arises stock of the Bank’s assets and liability position and profile
when the cushion provided by the liquid assets are not of assets & liabilities, monitors risks arising from changes in
sufficient enough to meet its obligation. In such a situation exchange rates in foreign currencies, review GAP analysis
banks often meet their liquidity requirements from market. and devise equity investment strategies. All market risk
Funding through market depends upon liquidity in the market components are managed by treasury consisting of front
and borrowing bank’s liquidity. office dealers with specific dealing limits, treasury middle

ANNUAL
290 REPORT 2023-24
office to monitor, measure and analyze risk related to Bank uses step by step risk management approach to
treasury management and independent back office. The monitor, assess, evaluate and design action plan to mitigate
back office executes the deals made by the dealers and also risks in future.
monitors the liquidity position of the Bank. For the purpose of
proper check and control, the front dealing room of treasury 5.1.6.FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
and the back office have different reporting line. The middle Fair value is a market-based measurement, not an entity
office of the Bank is independent of Treasury function and specific measurement. For some assets and liabilities,
report separately to ALCO and integrated risk management observable market transactions or market information might
department. be available. For other assets and liabilities, observable
market transactions and market information might
5.1.4.C. MARKET RISK ASSESSMENT METHODOLOGY not be available. However, the objective of a fair value
Out of the various components of market risk, foreign measurement in both cases is the same – to estimate the
exchange risk is the predominant risk in Nepal. Thus, a net price at which an orderly transaction to sell the asset or
open position approach has been adopted to measure the to transfer the liability would take place between market
market risk exposure of the Bank in aggregation and the participants at the measurement date under current market
capital requirement in commensurate of the same as set conditions (i.e. an exit price at the measurement date from
out by Capital Adequacy Framework issued by Nepal Rastra the perspective of a market participant that holds the asset
Bank. or owes the liability).

5.1.5.A. OPERATIONAL RISK Fair values are determined according to the following
Operational risks are risk of direct or indirect loss or hierarchy:
damaged reputation resulting from inadequate or failed
internal processes, people and systems, or from external LEVEL-1 INPUTS
events. Operational risk has always been inherent to the Bank Level 1 inputs are quoted prices (unadjusted) in active
and exists in all the activities performed. markets for identical assets or liabilities that the entity
can access at the measurement date. Held for trading
5.1.5.B. MANAGEMENT OF OPERATIONAL RISK investments and financial assets at fair value through OCI
As a part of monitoring operational risks, the Bank has have been recorded using Level 1 inputs.
devised Standard Operating Procedures for various banking
functions, which are reviewed and revised time to time as LEVEL-2 INPUTS
per the business dynamics. Level 2 inputs are inputs other than quoted prices included
within Level 1 that are observable for the asset or liability,
The Bank has adopted dual control mechanism in its all either directly or indirectly. Such observable inputs include:
operational activities where each and every financial and
non-financial transaction is subject to approval from an  Quoted price for similar instruments in active market
authority higher than the transaction initiator. Regular review
meetings are conducted to assess the adequacy of risk  Quoted price for identical or similar instruments in
monitoring mechanism and required changes are made inactive market
as and when felt necessary. Independent reconciliation unit
 Financial instruments are valued using models where all
is established to conduct daily reconciliation of all Nostro/
significant inputs are observable
agency accounts, Inter-Branch and Inter-Department
account under direct supervision of Head Finance &
Accounts, Head Office. The Bank has strong MIS in place to LEVEL-3 INPUTS
monitor the regular operational activities. In order to have Level 3 inputs are unobservable inputs for the asset
better focus on managing operational risks across branches or liability. Fair value measurements are derived using
and to monitor them from Head Office level, the Bank has valuation techniques in which current market transactions
independent Operations Risk Management Department and or observable market data are not available. Under this,
Compliance Department working as second line of defense instruments are fair valued using valuation models which
as per risk management framework of the Bank. The Risk have been tested against prices or inputs to actual market
Management Committee of the Board regularly meets and transactions and make use of the best estimates of the
reviews the risk management processes and risk position of most appropriate model assumptions. The Bank has used
the Bank. latest audited financial statements to arrive at book value for
investment in unquoted shares.

5.1.5.C. OPERATIONAL RISK ASSESSMENT METHODOLOGY

Operational risks are assessed employing the Basic 5.2 CAPITAL MANAGEMENT
Indicators Approach as set out by Capital Adequacy
Framework issued by Nepal Rastra Bank. The Basic Indicators I. QUALITATIVE DISCLOSURES
Approach assesses operational risk in aggregation and is Capital is very crucial component in a business. In case
calculated by dividing the operational risk capital charge of Banks, sufficient capital needs to be maintained for
by 11%. Bank assesses the operational risk based on specific business growth. Capital management approach is driven
situation, historical observations and internal assumption by by its desire to maintain a strong capital base to support
tracking and recording all relevant risk data of frequency, the business growth and to meet the regulatory capital
severity, operational losses and other external factors. The requirements.

ANNUAL 291
REPORT 2023-24
 Capital planning is an integral part of the Bank’s strategic plan. The Bank has robust capital planning and management
to meet its projected growth over the upcoming years during the normal as well as stressed situations. The Bank ensures
that adequate level of capital is maintained at all times. The Bank is well capitalized and is able to maintain required capital
through internal generation and also through other sources, if required.

MAIN FEATURES AND TERMS & CONDITIONS OF CAPITAL INSTRUMENTS

The Bank has raised capital of NPR 7,662,559,000 by issuing debentures qualified as subordinated term debt. The main features
and terms & conditions of the debentures outstanding as on July 15, 2024 are given below:

DEBENTURE NAME AMOUNT INTEREST RATE ISSUE DATE MATURITY DATE

SBL Debenture 2082

2,162,559,000 10.50% 1/13/2019 1/12/2026
(Face Value NPR 1,000 per debenture)

SBL Debenture 2083

2,500,000,000 10.25% 9/12/2019 9/10/2026
(Face Value NPR 1,000 per debenture)

SBL Debenture 2084

3,000,000,000 8.50% 10/13/2020 10/12/2027
(Face Value NPR 1,000 per debenture)

Total 7,662,559,000

OTHER TERMS & CONDITIONS

1. The debentures are redeemable at the time of maturity at face value.

2. Interest is payable on a semi-annual basis.

II. QUANTITATIVE DISCLOSURES

1. Capital structure and capital adequacy

 Tier 1 capital and a breakdown of its components

NPR in ‘000
S.N. PARTICULARS AMOUNT
Tier 1 Capital (Core Capital) (CET1+ AT1) 22,800,529
Common Equity Tier 1 (CET 1) 22,800,529
a. Paid Up Equity Share Capital 14,089,980
b. Equity Share Premium -
c. Proposed Bonus Equity shares -
d. Statutory General Reserves 5,030,176
e. Retained Earnings 580,362
f. Unaudited Current year Cumulative Profit/(Loss) -
g. Capital Adjustment Reserve 19,428
h. Debenture Redemption Reserve 4,502,133
i. Less: Intangible Assets 146,147
j. Less: Investment in equity of institutions with financial interests 1,275,403
k. Less: Deferred tax Assets -
Additional Tier 1(T1) -

 Tier 2 capital and a breakdown of its components

NPR in ‘000
S.N. PARTICULARS AMOUNT
a Cumulative and/or Redeemable Preference Shares -

b Subordinated Term Debt 3,232,512

c Hybrid Capital Instruments -

d General Loan Loss Provision 2,753,498

e Investment Adjustment Reserve 11,365

ANNUAL
292 REPORT 2023-24
 f Assets Revaluation Reserve -

g Exchange Equalization Reserve 98,385

h Other Reserves -

Total Tier 2 Capital 6,095,760

 Subordinated Term Debt

1. The Bank also issued SBL Debenture 2082 in FY 2018/19 for NPR 2.16 billion with face value of NPR 1000. The salient features of SBL
Debenture 2082 are as follows:

 Maturity period: 7 Years

 Interest rate: 10.50% per annum

 Interest Payment frequency: Half Yearly

 Claim in case of liquidation: After depositors

 Debenture Redemption Reserve shall be created to redeem the debenture at maturity.

 The debenture can be pledged with other banks and financial institution.

 Listed with Nepal Stock Exchange.

2. The Bank also issued SBL Debenture 2083 in FY 2019/20 for NPR 2.50 billion with face value of NPR 1000. The salient features of
SBL Debenture 2083 are as follows:

 Maturity period: 7 Years

 Interest rate: 10.25% per annum

 Interest Payment frequency: Half Yearly

 Claim in case of liquidation: After depositors

 Debenture Redemption Reserve shall be created to redeem the debenture at maturity.

 The debenture can be pledged with other banks and financial institution.

 Listed with Nepal Stock Exchange.

3. The Bank also issued SBL Debenture 2084 in FY 2020/21 for NPR 3 billion with face value of NPR 1000. The salient features of SBL
Debenture 2084 are as follows:

 Maturity period: 7 Years

 Interest rate: 8.50% per annum

 Interest Payment frequency: Half Yearly

 Claim in case of liquidation: After depositors

 Debenture Redemption Reserve shall be created to redeem the debenture at maturity.

 The debenture can be pledged with other banks and financial institution.
Listed with Nepal Stock Exchange.

Deductions from Capital:

 The Bank has investments of NPR 51 million in the equity shares of Siddhartha Capital Limited, NPR 194.40 million in the equity
shares of Nepal Clearing House Limited, NPR 30 million in equity shares of Avasar Equity Limited and NPR 1 billion in Avsar
Equity Fund which has been deducted from the core capital while computing capital adequacy.

ANNUAL 293
REPORT 2023-24
  Total Qualifying Capital
NPR in ‘000
PARTICULARS AMOUNT
Common Equity Tier 1 (CET1) 22,800,529

Additional Tier 1 (AT1) -

Supplementary Capital (Tier 2) 6,095,760

Total Capital Fund 28,896,289

 Capital Adequacy Ratio

CAPITAL ADEQUACY RATIO %
Common Equity Tier 1 Ratio 9.38%

Core Capital Ratio - Tier 1 9.38%

Total Capital Adequacy Ratio (Tier 1 & Tier 2) 11.88%

 Internal approach of the Bank to assess capital adequacy

In order to be prepared for distressed economic environments, the Bank assesses the adequacy of its capital by incorporating
various potential scenarios and being responsive to changes in the economy, market, competitive or political landscape, or
other external factors.

Following elements are taken into consideration while assessing capital adequacy of the Bank:

 Minimum capital requirements as per NRB

 Business growth prospects and risks

 Dividend policy

 Potential capital raising instruments such as equity, preference stocks, bonds, etc.

 Various stress scenarios

 Disposing of assets

 Others as considered necessary by the senior management

RISK EXPOSURES
 Risk weighted exposures for Credit Risk, Market Risk and Operational Risk
NPR in ‘000
PARTICULARS AMOUNT
Risk Weighted Exposure for Credit Risk 220,279,808
Risk Weighted Exposure for Operational Risk 11,337,761
Risk Weighted Exposure for Market Risk 1,777,018
Adjustments under Pillar II:
Add: 3% of Gross income of last FY due to supervisor is not satisfied with sound practice of
2,740,463
management of operational risk (6.4 a 7)

Add: 3% of the total RWE due to supervisor is not satisfied with the overall risk management
7,001,838
policies and procedures of the Bank (6.4 a 9)

TOTAL RISK WEIGHTED EXPOSURE (AFTER PILLAR II ADJUSTMENT) 243,136,889

 Risk Weighted exposure of Credit Risk

NPR in ‘000
RISK WEIGHTED
S.N. CATEGORIES
EXPOSURE
1 Claims on Domestic Public Sector Entities -

2 Claims on domestic banks that meet capital adequacy requirements 1,764,772

3 Claims on domestic banks that do not meet capital adequacy requirements -

ANNUAL
294 REPORT 2023-24
 RISK WEIGHTED
S.N. CATEGORIES
EXPOSURE
4 Claims on foreign bank (ECA 0-1) 223,303

5 Claims on foreign bank (ECA 2) 1,397,103

6 Claims on foreign bank (ECA 3-6) 1,747,750

Claims on foreign bank incorporated in SAARC region operating with a buffer of 1% above
7 1,228,639
their respective regulatory capital requirement

8 Claims on Domestic Corporates 104,944,116

9 Claim on Foreign Corporate (ECA 0-1) -

10 Claim on Foreign Corporate (ECA 2) -

11 Claims on Regulatory Retail Portfolio (not overdue) 35,172,377

12 Claims secured by residential properties 7,400,540

13 Claims secured by residential properties (overdue) 392,779

14 Claims Secured by Commercial Real Estate 147,154

15 Past due claims(except for claim secured by residential properties) 9,855,139

16 High Risk Claims 15,458,637

17 Lending against Shares (up to Rs.5 Million) 875,261

18 Lending against Shares (above Rs.5 Million) 6,108,952

19 Trust Receipt Loans for Trading Firms 5,105,083

20 Personal Hire purchase/Personal Auto Loans 1,243,113

Investments in equity and other capital instruments of institutions listed in the stock
21 2,403,514
exchange

22 Investment in Equity of Institution not listed in the Stock Exchange 193,403

23 Staff Loan secured by residential property 2,292,432

24 Cash in transit and other cash items in the process of collection 45,650

25 Other Assets 6,213,311

26 Off Balance Sheet Items 16,066,782

Total Risk Weighted Exposures under different categories of Credit Risk 220,279,808

 Total Risk Weighted Exposure calculation table

NPR in ‘000
PARTICULARS AMOUNT
Total Risk Weighted Exposures 243,136,889
Tier 1 Capital (Core Capital) (CET1+AT1) 22,800,529
Total Capital Fund 28,896,289
Total Core Capital to Total Risk Weighted Exposures % 9.38%
Total Capital Fund to Total Risk Weighted Exposures % 11.88%

Details of Non-Performing Assets

 Amount of Non-Performing Assets (both Gross and Net)
NPR in ‘000
NON-PERFORMING ASSETS AMOUNT LOAN LOSS PROVISION NET NPL
Restructured/Rescheduled - - -
Sub-Standard 1,352,505 328,988 1,023,516
Doubtful 793,828 381,555 412,273
Loss 2,271,535 2,224,345 47,190
TOTAL 4,417,867 2,934,889 1,482,978

ANNUAL 295
REPORT 2023-24
 Non-Performing Assets (%): 2.17 %

 Compliance with external requirement

The Bank is required to comply with the minimum Capital Adequacy Requirements of Nepal Rastra Bank. Throughout the
reporting period, the Bank has complied with minimum Capital Adequacy requirements.

 Debentures issued as resources

Other than debentures worth NPR 7,662,559,000 issued for the purpose of capital management, the Bank has issued debenture
of NPR 4,000,000,000 in FY 2021/22 for the purpose of resources eligible to count in CD ratio calculation. While issuing the
debenture, the Bank has incurred cost of NPR 6.79 million which is 0.17% of issued debenture.

The main features and terms & conditions of the new debenture amounting NPR 4 billion are as follows:
Amount in NPR

DEBENTURE NAME AMOUNT INTEREST RATE ISSUE DATE MATURITY DATE

SBL Debenture 2089
4,000,000,000 10.75% 7/16/2022 7/15/2032
(Face Value NPR 1,000 per debenture)

 Maturity period: 10 Years

 Interest rate: 10.75% per annum

 Interest Payment frequency: Half Yearly

 Debenture Redemption Reserve has not been created to redeem the debenture at maturity as this debenture has been
issued for the purpose of resources only eligible to count for CD ratio and such reserve is not required as per NRB directive.

 The debenture can be pledged with other banks and financial institution.

 Listed with Nepal Stock Exchange.

5.1 CLASSIFICATION OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

FINANCIAL ASSETS
NFRS 9 requires financial assets to be classified in one of the following categories:
Financial assets at fair value through profit or loss

 Financial assets at amortized cost

 Financial assets at fair value through OCI

Financial assets at fair value through profit or loss have two sub-categories:

 Financial asset that is designated on initial recognition as one to be measured at fair value with fair value changes in profit
or loss.

 Held for trading

FINANCIAL LIABILITIES
NFRS 9 recognizes two classes of financial liabilities:

 Financial liabilities at fair value through profit or loss

 Other financial liabilities measured at amortized cost using the effective interest rate method

The category of financial liability at fair value through profit or loss has two sub-categories:

 Financial liability that is designated by the entity as a liability at fair value through profit or loss upon initial recognition

 Held for trading

ANNUAL
296 REPORT 2023-24
5.4 OPERATING SEGMENT INFORMATION

1. GENERAL INFORMATION

a. Factors used to identify the Bank’s reportable segments

The Bank has identified the key segments of business on the basis of nature of operations that assist the Executive Committee
of the Bank in decision making process and to allocate the resources. It will help the management to assess the performance
of the business segments. The business segments identified are Banking (including loans, deposits and trade operations),
Digital Payment Operations, Remittance, and Treasury. Treasury Department acts as the fund manager of the Bank.

b. Types of products and services from which each reportable segment derives its revenues

(A) REMITTANCE SERVICES

1 Remittance fee and commission

2 IBT Interest Income

3 Forex Income

4 Other fees and commission

(B) DIGITAL PAYMENT OPERATIONS

1 Interchange Income (VISA/CUP/NEPS)

2 Credit Card

3 Debit Card

4 Prepaid Card

5 ATM Fees

6 Merchant Settlement Fees and commission

7 Other fees, commission and miscellaneous income

8 Forex Income

(C) TREASURY

1 Interest Income from placements and investments

2 Profit/(Loss) on sale of shares/bonds

3 Bullion Trading Income

4 Dividend Income on Investments

5 Forex Gain

6 IBT Income

7 Rebate from Nostro Banks

8 Other Fees and Commission income

(D) BANKING

1 Income from Loan Products

2 Income from Bills Purchase and Discounting

3 Income from issuance of Letter of Credit

4 Income from issuance of Bank Guarantee

5 Income from Document Collection

6 Income from Remittance

7 Income from Bancassurance

8 Income from swift charges

9 Forex Gain

10 Profit/(loss) on sale of assets

11 IBT Income

12 Income from other Banking Services

ANNUAL 297
REPORT 2023-24
 2.INFORMATION ABOUT PROFIT OR LOSS, ASSETS AND LIABILITIES

FY 2023-24 In NPR

DIGITAL PAYMENT
PARTICULARS REMITTANCE TREASURY BANKING TOTAL
OPERATIONS
Revenues from
(a) 576,179,888 78,075,822 4,192,208,046 23,317,114,676 28,163,578,431
external customers

(b) Intersegment revenues 18,148,456 355,602,855 147,861,004 9,651,821,563 10,173,433,879

(c) Net Revenue 594,328,344 433,678,676 4,340,069,050 32,968,936,238 38,337,012,309

(d) Interest revenue 97,010,410 356,363,097 3,860,527,982 31,537,048,187 35,850,949,676

(e) Interest expense (34,475,364) (284,894,673) (2,304,259,922) (25,297,249,746) (27,920,879,705)

(f) Net interest revenue 62,535,046 71,468,424 1,556,268,060 6,239,798,441 7,930,069,971

Depreciation and
(g) (2,212,048) (292,822) (144,216) (475,500,493) (478,149,579)
amortization

(h) Segment profit /(loss) 170,099,019 94,897,612 2,049,789,384 2,160,979,945 4,475,765,961

Entity’s interest in
the profit or loss of
(i) - - - - -
associates accounted
for using equity method

Other material non-

(j) - - - - -
cash items

(k) Impairment of assets 11,134,096 - - (1,062,257,237) (1,051,123,141)

(l) Segment assets 540,619,773 4,142,780,045 5,236,820,115 287,421,197,573 297,341,417,505

(m) Segment liabilities (496,593,229) (4,142,780,045) (5,184,574,462) (287,517,469,770) (297,341,417,505)

FY 2022-23 In NPR
DIGITAL PAYMENT
PARTICULARS REMITTANCE TREASURY BANKING TOTAL
OPERATIONS
Revenues from
(a) 569,258,868 90,489,156 4,097,053,909 25,148,779,451 29,905,581,384
external customers

(b) Intersegment revenues 10,374,377 302,842,711 175,160,636 11,269,441,655 11,757,819,378

(c) Net Revenue 579,633,244 393,331,867 4,272,214,545 36,418,221,105 41,663,400,761

(d) Interest revenue 26,094,510 302,851,438 3,767,746,510 35,202,301,761 39,298,994,219

(e) Interest expense (35,763,842) (265,885,605) (2,699,914,083) (28,123,855,721) (31,125,419,250)

(f) Net interest revenue (9,669,332) 36,965,833 1,067,832,428 7,078,446,040 8,173,574,969

Depreciation and
(g) (1,969,966) (318,468) (170,255) (445,547,647) (448,006,336)
amortization

(h) Segment profit /(loss) 175,529,774 67,762,591 1,537,920,382 2,784,046,249 4,565,258,995

Entity's interest in
the profit or loss of
(i) - - - - -
associates accounted
for using equity method

Other material non-

(j) - - - - -
cash items

(k) Impairment of assets (1,253,804) - - (1,186,307,372) (1,187,561,177)

(l) Segment assets 608,085,477 3,511,705,727 18,085,543,851 263,745,751,463 285,951,086,519

(m) Segment liabilities (432,923,647) (3,443,943,137) (16,549,900,984) (265,524,318,752) (285,951,086,519)

ANNUAL
298 REPORT 2023-24
3. MEASUREMENT OF OPERATING SEGMENT PROFIT OR LOSS, ASSETS AND LIABILITIES
A. BASIS OF ACCOUNTING
All transactions between the reportable segments are accounted for using pre-determined transfer price.

B. NATURE OF DIFFERENCES BETWEEN THE MEASUREMENTS OF THE REPORTABLE SEGMENTS’ PROFITS OR LOSSES AND THE BANK’S PROFIT OR LOSS
BEFORE INCOME TAX
There is no difference between the measurement of the reportable segments’ profit and the Bank’s profit before income tax.

C. NATURE OF DIFFERENCES BETWEEN THE MEASUREMENTS OF THE REPORTABLE SEGMENTS’ ASSETS AND THE BANK’S ASSET
There is no difference between the measurement of the reportable segments’ assets and the Bank’s asset.

D. NATURE OF ANY CHANGES FROM PRIOR PERIODS IN THE MEASUREMENT METHODS USED TO DETERMINE REPORTED SEGMENT PROFIT OR LOSS AND
THE EFFECT, IF ANY
No changes are made in the measurement methods used to determine reported segment profit or loss from prior periods.

E. NATURE AND EFFECT OF ANY ASYMMETRICAL ALLOCATIONS TO REPORTABLE SEGMENTS

No asymmetrical allocations are made to reportable segments.

4.RECONCILIATIONS

(A) REVENUE In NPR

2023-24 2022-23
Total revenues for reportable segments 38,337,012,309 41,663,400,761
Other revenues - -
Elimination of intersegment revenues (10,173,433,879) (11,757,819,378)
Entity’s revenues 28,163,578,430 29,905,581,383
Note: Intersegment Revenue consists of following items:

2023-24 2022-23
Interest 10,134,921,680 11,638,996,448
Vault Cash Incentive 38,512,198 118,822,931
Total 10,173,433,879 11,757,819,378

(B) PROFIT OR LOSS

2023-24 2022-23
Total profit or loss for reportable segments 4,475,765,961 4,565,258,995
Other profit or loss - -
Elimination of intersegment profits - -
Unallocated amounts - -
Profit before income tax 4,475,765,961 4,565,258,995

(C) ASSETS
2023-24 2022-23
Total assets for reportable segments 297,341,417,505 285,951,086,519
Other assets - -
Unallocated amounts - -
Entity’s assets 297,341,417,505 285,951,086,519

ANNUAL 299
REPORT 2023-24
 (D) LIABILITIES Amount in NPR

2023-24 2022-23
Total liabilities for reportable segments 297,341,417,505 285,951,086,519
Other liabilities - -
Unallocated liabilities - -
Entity’s liabilities 297,341,417,505 285,951,086,519

5. INFORMATION ABOUT PRODUCTS AND SERVICES Amount in NPR

2023-24 2022-23
(A) REMITTANCE SERVICES 433,678,676 393,331,867
1 Remittance fee and commission 35,678,290 47,063,056

2 Income from Loan products 655,766 -

3 IBT Interest Income 355,602,855 302,842,711

4 Forex Income 35,275,579 41,373,697

5 Other fees and commission 6,466,186 2,052,404

(B) DIGITAL PAYMENT OPERATIONS 594,328,344 579,633,244
1 Interchange Income (VISA/CUP/NEPS) 99,713,125 80,221,552

2 Credit Card 98,453,405 23,348,984

3 Debit Card 146,743,000 129,919,328

4 Prepaid Card 8,351,597 6,510,254

5 ATM Fees 59,220,258 39,550,574

6 Merchant Settlement Fees and commission 69,909,813 62,072,535

7 Other fees, commission and miscellaneous income 108,875,668 234,920,277

8 Forex Income 3,061,477 3,089,739

(C) TREASURY 4,340,069,050 4,272,214,545
1 Interest Income from placements and investments 3,870,144,807 3,778,714,639

2 Profit/(Loss) on sale of shares/bonds 30,332,584 -

3 Bullion Trading Income 10,455,119 10,529,069

4 Dividend Income on Investments 145,575,980 147,805,630

5 Forex Gain 203,184,866 130,908,450

6 Rebate from Nostro Banks 13,515,708 15,864,074

7 Other Fees and Commission income 66,859,987 188,392,682

(D) BANKING 32,968,936,238 36,418,221,105
1 Income from Loan Products 19,494,110,932 23,540,025,225

2 Income from Bills Purchase and Discounting 26,161,879 14,100,021

3 Income from issuance of Letter of Credit 117,968,873 131,290,748

4 Income from issuance of Bank Guarantee 180,473,987 191,048,586

5 Income from Document Collection 64,871,374 65,265,940

6 Income from Remittance 40,974,583 44,727,113

7 Income from Bancassurance 2,274,480 7,274,276

8 Income from swift charges 29,935,265 29,441,395

9 Forex Gain 102,688,791 113,124,899

10 Profit/(loss) on sale of assets 7,378,307 16,838,077

11 IBT Income 9,649,890,037 11,267,772,776

12 Income from other Banking Services 3,252,207,729 997,312,049

Total Revenue (including intersegment revenue) 38,337,012,309 41,663,400,761

ANNUAL
300 REPORT 2023-24
6. INFORMATION ABOUT GEOGRKAPHICAL AREAS
Geographical break down of total income of the Bank as reported in Pt. 4 (a) is as follows:
Amount in NPR

2023-24 2022-23
(A) DOMESTIC 38,337,012,309 41,663,400,761

Koshi Province 3,084,726,528 3,466,518,910

Madhesh Province 3,086,548,365 3,534,307,795

Bagmati Province 25,356,919,919 27,141,919,196

Gandaki Province 2,236,925,044 2,496,829,531

Lumbini Province 3,318,301,869 3,629,720,863

Karnali Province 267,880,560 295,283,764

Sudurpaschim Province 985,710,023 1,098,820,701

(b) Foreign - -

Total 38,337,012,309 41,663,400,761

7. INFORMATION ABOUT MAJOR CUSTOMERS COMMITMENTS

None of the external customer of the Bank individually Where the Bank has confirmed its intention to provide funds
contributes 10% or more to the Bank’s revenue as at July 16, to a customer or on behalf of a customer in the form of
2023 as well as July 15, 2024. loans, overdrafts, future guarantees, whether cancellable or
not, or letters of credit and the Bank has not made payments
at the reporting date, those instruments are included in
5.5 SHARE OPTIONS AND SHARE BASED PAYMENT
these financial statement as commitments.
Share options is a contract that gives the holder the right, but
not the obligation, to subscribe the Bank’s shares at a fixed
Explanatory information of contingent liabilities and
or determinable price for a specified period. A share-based
commitments are given in Note No. 4.28 (including Note No.
payment is a transaction in which the Bank receives goods or
4.28.1- 4.28.5).
services either as consideration for its equity instruments or
by incurring liabilities for amounts based on the price of the
entity’s shares or other equity instruments of the entity. 5.7 RELATED PARTIES DISCLOSURES
The bank has not entered into any share option or share Parties are considered to be related if one party has the
based payment contract during the reporting period. ability to control the other party or exercise significant
influence over the other party in making financial or
operational decisions and include major shareholders,
5.6 CONTINGENT LIABILITIES AND COMMITMENT
subsidiary companies, associates, retirement funds, directors
and key management personnel and their close family
CONTINGENT LIABILITIES
members.
Where the Bank undertakes to make a payment on behalf of
Banking transactions with the related parties are executed
its customers for guarantees issued, such as for performance
substantially on the same terms, including mark-up
bonds or as irrevocable letters of credit as part of the Bank’s
rates and collateral, as those prevailing at the time for
transaction banking business for which an obligation to make
comparable transactions with unrelated parties and do not
a payment has not arisen at the reporting date, those are
involve more than a normal risk.
included in these financial statements as contingent liabilities.
Other contingent liabilities primarily include revocable letters
of credit, bonds issued on behalf of customers to customs, for
5.7.1 SUBSIDIARY
Transactions between the Bank and its subsidiary,
bids or offers and income tax litigations.
Siddhartha Capital Limited, meet the definition of related
party as defined under NAS-24 “Related Party Disclosures”.

ANNUAL 301
REPORT 2023-24
 2023-24 2022-23
TRANSACTIONS DURING THE YEAR
(NPR) (NPR)

Call Deposits held by Siddhartha Capital Limited at Siddhartha Bank Ltd. 348,298,539 347,668,418

Interest earned by Siddhartha Capital Ltd. on deposits held at Siddhartha Bank Ltd. 13,256,761 10,854,108

Share RTS fee earned by Siddhartha Capital Ltd 689,712 793,796

DP related Income earned by Siddhartha bank 2,494,845 1,187,143

Dividend income earned by Siddhartha bank 24,225,000 24,225,000

Investment in “Siddhartha Equity Fund” managed by Siddhartha Capital Limited

- 225,000,000
(Closing Balance at cost)

Investment in “Siddhartha Investment Growth Scheme-2” managed by Siddhartha

210,000,000 210,000,000
Capital Limited (Closing Balance at cost)

Investment in “Siddhartha Systematic Investment Scheme” managed by Siddhartha

90,395,000 45,445,000
Capital Limited (Closing Balance at cost)

Investment in “Siddhartha Investment Growth Scheme-3” managed by Siddhartha

120,000,000 120,000,000
Capital Limited (Closing Balance at cost)

All of the transactions mentioned above, except for the investments made and sum received from any of the mutual funds
managed by Siddhartha Capital Limited, have been eliminated upon consolidation.

5.7.2 ASSOCIATES
The Bank considers an investee as its associate if the Bank can exercise significant influence in the financial and operating
policy decisions of the investee but does not have control or joint control of those policies.
The Bank does not exercise significant influence in the financial and operating policy decisions of any of its investees as at July
16, 2023 and July 15, 2024.

5.7.3 DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL (KMP)

Key Management Personnel and their immediate family members are also considered to be related parties for disclosure
purpose as per NAS-24 “Related Party Disclosures”.

As per Nepal Financial Reporting Standard (NAS 24) “Related Party Disclosures”, Key Management Personnel are those having
authority and responsibility for planning, directing and controlling the activities of the entity. The Bank considers the members
of its Board, Chief Executive Officer and members of Executive Committee as Key Management Personnel (KMP) of the Bank.
Following is the list of Board of Directors and CEO bearing office at July 15, 2024.

Mr. Manoj Kumar Kedia Chairman

Mr. Narendra Kumar Agrawal Director

Mr. Rahul Agrawal Director

Mr. Dinesh Shanker Palikhe Director

Mr. Ankit Kedia Director

Mrs. Mina Kumari Sainju Independent Director

Mr. Sundar Prasad Kadel Chief Executive Officer

A. COMPENSATION TO THE MEMBERS OF THE BOARD

All members of the Board are non-executive directors and no executive compensation is paid to the directors. Specific non-
executive allowances paid to directors are as under:
Board meeting fees NPR 1,466,000
Other benefits NPR 2,906,770
Capacity development expenses NPR 7,539,762
These allowances and benefits are approved by the Annual General Meeting of the Bank.

ANNUAL
302 REPORT 2023-24
B. COMPENSATION TO OTHER KMP OF THE BANK

NATURE OF COMPENSATION TOTAL COMPENSATION (NPR) REMARKS

Short-term employee benefits 112,257,942 Salary, PF and allowances of executive committee members
Post employee benefits Nil
Other long-term benefits 2,109,081 Sick Leave and Annual Leave
Terminal benefits 19,561,168 Gratuity benefits of eligible executive committee members
Share based payments Nil

5.8 MERGER AND ACQUISITION Above proposed bonus shares has not been recognized
The Bank has not entered into any merger or acquisition in share capital. The Bank will recognize the same as share
activity in FY 2023-24. capital once the proposed bonus shares is approved by
shareholders in the Annual General Meeting.
5.9 ADDITIONAL DISCLOSURES OF NON-CONSOLIDATED ENTITIES
Nepal Financial Reporting Standard (NAS 24) “Disclosure of
Interests in Other Entities”, is applicable when an entity has 5.11 AVAILMENT OF CARVE-OUTS NOTIFIED BY THE
INSTITUTE OF CHARTERED ACCOUNTANTS OF NEPAL
interest in any of the following:
The Institute of Chartered Accountants of Nepal has notified
 Subsidiaries 2 carve-outs in NFRS which allows alternative treatment.
Accordingly, the Bank has availed following carve-outs while
 Joint arrangements (joint operations or joint ventures) preparing its financial statements for FY 2023-24:

 Associates
A) CARVE-OUT : 1 - NFRS 9-FINANCIAL INSTRUMENTS: PARA 5.4 READ
TOGETHER WITH APPENDIX A (DEFINED TERMS) RELATING TO EFFECTIVE
 Unconsolidated structured entities
INTEREST RATE
As per NFRS-9, an entity shall estimate cash flows considering
The Bank has already disclosed its interests in subsidiaries
all contractual terms of the financial instrument (for example,
in 5.7. Related parties’ disclosures. The Bank does not have
prepayment, call and similar options)
any interest in any form of joint arrangements, associates or
unconsolidated structured entities in reporting period and
corresponding previous year. Financial Instruments: Para 5.4
read together with appendix
Carve-out: 1 NFRS-9
A (Defined Terms) relating to
5.10 EVENTS AFTER REPORTING PERIOD
Effective Interest Rate
Events after the reporting date are those events, favorable
and unfavorable, that occur between the reporting date and
the date the Financial Statements are authorized for issue. Financial Instruments: Para 5.5
The Bank follows NAS-10 “Events after the Reporting Period” to Carve-out: 2 NFRS-9
Impairment
account for and report the events that have occurred after
the reporting period.

but shall not consider future credit losses while calculating

 Adjusting events after reporting period
the effective interest rate. The calculation includes all fees
The Bank has also availed the provision as provided by NRB
and points paid or received between parties to the contract
directive that allows Banks to consider interest recovery
that are an integral part of the effective interest rate (see
made till August 16, 2024 while calculating amount to be
paragraphs B5.4.1-B5.4.3)
transferred to regulatory reserve on account of interest
income recognized on accrual basis but not realized till July
The Carve-out states that the effective interest rate
15, 2024.
calculation shall include all fees and points paid or received,
unless it is immaterial or impracticable to determine reliably.
 Non-adjusting events after reporting period
The Bank has availed this Carve-out and has not considered
The Board of Directors of the Bank has proposed the
all fees and points paid or received which are impracticable
distribution of 4 % of paid up capital as cash dividend
to measure reliably while determining effective interest rate.
(including tax) amounting NPR 563,599,208 vide board
meeting dated December 06, 2024 for the year ended July
B) CARVE-OUT : 2- NFRS 9: FINANCIAL INSTRUMENTS: PARA 5.5
15, 2024.
IMPAIRMENT
As per the carve-out, an entity shall assess at the end of each
In accordance with Nepal Accounting Standard - NAS 10
reporting period whether there is any objective evidence
(Events after the Reporting Period), above proposed cash
that a financial asset or group of financial assets measured
dividend has not been recognized as a liability as at the year
at amortized cost is impaired. If there is objective evidence
end. The Bank will recognize the same as its liability once the
that an impairment loss on financial assets measured at
dividend is approved by shareholders.
amortized cost has been incurred, the amount of impairment
loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future

ANNUAL 303
REPORT 2023-24
 cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective
interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset shall be reduced
either directly or through use of an allowance account. The amount of the loss shall be recognized in the Statement of Profit or
Loss.

The Carve-out requires Banks to measure impairment loss on loans and advances as the higher amount derived as per norms
prescribed by Nepal Rastra Bank for loan loss provision and amount determined as per the incurred loss method described in
above paragraph.

The Bank has availed the Carve-out and has accordingly recognized impairment loss on loans and advances as the higher
amount derived as per norms prescribed by Nepal Rastra Bank for loan loss provision and amount determined as per the
incurred loss method described in the first paragraph. The detail of impairment loss on loans and advances are as follows:

Amount (NPR)
PARTICULARS FY 2023-24 FY 2022-23
Total Loan loss provision as per norms prescribed by Nepal Rastra Bank
6,021,072,938 4,969,950,366
(NRB Directive No. 2)

Total Impairment as per Incurred loss model 544,364,312 747,390,433

As, Loan loss provision as per norms prescribed by Nepal Rastra Bank is higher in both years, impairment loss on loans and
advances is made accordingly.

The Bank has classified total loan loss provision mentioned above into 2 categories viz. Individual Impairment and Collective
Impairment. The Bank has classified provision on loans having LLP rates of 1.20% and 5% as Collective Impairment and provision
on loans having LLP rates of 12.5%, 25%, 50% and 100% as Individual Impairment. The Bank has availed this Carve-out and has
not considered all fees and points paid or received which are impracticable to measure reliably while determining effective
interest rate.

5.12 GENERAL RESERVE

20 percent of the profit after tax is transferred to General Reserves as per Section 44 of Banks and Financial Institutions Act
2073. In FY 2023-24, the Bank has transferred NPR 620,980,435 to the General Reserve Fund from the current year’s profit. Total
General Reserve as at Balance Sheet date is NPR 5,030,176,187.

5.13 EXCHANGE FLUCTUATION FUND

25 percent of the revaluations gain on foreign exchange is transferred to exchange fluctuation fund as per Section 45 of Banks
and Financial Institutions Act 2073. In FY 2023-24, the Bank has transferred NPR 28,496,337 to Exchange Fluctuation Fund from
the current year profit. The balance in Exchange Fluctuation Fund stands at NPR 98,384,933 as on July 15, 2024.

PARTICULARS AMOUNT (NPR)

Opening balance as on July 17, 2023 (A) 69,888,596
Transfer to Exchange Fluctuation Fund in FY 2023-24 (B) 28,496,337
Closing balance as on July 15, 2024 (A+B) 98,384,933

5.15 CAPITAL REDEMPTION RESERVE

Capital Redemption Reserve has been created as per Nepal Rastra Bank Directive No. 16. The Bank has appropriated NPR
1,460,426,500 to Capital Redemption Reserve from current year’s profit. Total Capital Redemption Reserve as at Balance Sheet
date is NPR 4,502,132,500.

PARTICULARS AMOUNT (NPR)

Opening balance as on July 17, 2023 (A) 3,041,706,000

Transfer to Capital Redemption Reserve fund in FY 2023-24 (B) 1,460,426,500

Closing balance as on July 15, 2024 (A+B-C) 4,502,132,500

ANNUAL
304 REPORT 2023-24
TRANSFER MADE IN CAPITAL REDEMPTION RESERVE Amount in NPR

DEB DEB DEB

DEBENTURES TOTAL
2082 2083 2084

FY 2019-20 360,426,500 - - 360,426,500

FY 2020-21 360,426,500 - - 360,426,500

FY 2021-22 360,426,500 500,000,000 - 860,426,500

FY 2022-23 360,426,500 500,000,000 600,000,000 1,460,426,500

FY 2023-24 360,426,500 500,000,000 600,000,000 1,460,426,500

FY 2024-25 360,426,500 500,000,000 600,000,000 1,460,426,500

FY 2025-26 - 500,000,000 600,000,000 1,100,000,000

FY 2026-27 600,000,000 600,000,000

Total 2,162,559,000 2,500,000,000 3,000,000,000 7,662,559,000

5.15 CAPITAL ADJUSTMENT FUND

PARTICULARS AMOUNT (NPR)

Opening balance as on July 17, 2023 19,427,832

Closing balance as on July 15, 2024 19,427,832

5.16 INVESTMENT ADJUSTMENT RESERVE

Investment Adjustment Reserve has been created on investments classified as ‘financial assets at fair value through OCI’ that
are not listed in stock exchange except for investments in Credit Information Centre Limited, Nepal Clearing House Limited and
National Banking Training Institute as per Nepal Rastra Bank Directives. Total outstanding investment adjustment reserve as at
Balance Sheet date is NPR 11,365,167.

INVESTMENT ADJUSTMENT
PARTICULARS COST PRICE (NPR) % RESERVE
RESERVE (NPR)

Credit Information Center Limited 1,907,600 Exemption by NRB -

Nepal Clearing House Limited 194,402,600 Exemption by NRB -
National Banking Training Institute 1,834,860 Exemption by NRB -
ICRA Nepal Limited 760,000 100% 760,000
Prabhu Capital Limited 4,500,000 100% 4,500,000
SWIFT SC 6,105,167 100% 6,105,167
Total Investment 209,510,227 11,365,167

5.17 OTHER RESERVES

A. EMPLOYEES RELATED RESERVE FUND

As per NRB Unified Directives, the Bank is required to expend at least 3% of total salary and allowance expenses of previous
year i.e. FY 2022-23 in employees training and development. If the required amount could not be spent for the purpose,
employees related reserve fund should be created for the shortfall amount. Accordingly, the Bank has allocated NPR 5,818,439
in Employees Related Reserve Fund for FY 2023-24 as shortfall amount. As of Balance Sheet date, the Bank’s Employee Related
Reserve Fund stands at NPR 59,384,594.


PARTICULARS AMOUNT (NPR)

Opening balance as on July 17, 2023 (A) 53,566,155

3% of Total Employee expenses for FY 2022-23 (B) 53,079,238

Actual Expense incurred in Employee training and development in FY 2022-23 (C) 47,260,799

Closing balance as on July 15, 2024 (A+B-C) 59,384,594

ANNUAL 305
REPORT 2023-24
 B. CSR FUND
As per NRB Unified Directives, the Bank has to transfer 1% of current year’s profit to CSR fund. Accordingly, the Bank has
transferred NPR 30,800,287 to CSR Fund from net profit of FY 2023-24. As of Balance Sheet date, the Bank’s CSR fund stands at
NPR 59,349,899.

PARTICULARS AMOUNT (NPR)

Opening balance as on July 17, 2023 50,950,230

1% of Net profit for FY 2023-24 to be transferred to CSR Fund 30,800,287

Reversal of amount allocated for CSR expense in prior years 1,600,000

CSR expenses incurred out of CSR Fund in FY 2023-24 (24,000,617)

Closing balance as on July 15, 2024 59,349,899

The detail of province-wise and sector-wise expenditure made in CSR activities in FY 2023-24 is mentioned below:

PROVINCE
SECTOR TOTAL
KOSHI MADHESH BAGMATI GANDAKI LUMBINI KARNALI SUDURPASCHIM

Health 516,318 630,000 2,864,363 1,409,997 2,209,455 49,946 239,727 7,919,806

Education 292,443 1,435,094 415,580 3,849,267 427,420 248,200 704,902 7,372,906

Financial Literacy 366,464 276,441 1,054,635 227,700 1,541,206 231,900 421,092 4,119,438

Environment 267,139 340,615 353,584 268,650 487,350 77,000 37,460 1,831,798

Disaster
- - - - - 1,493,750 - 1,493,750
Management

Culture 54,997 - 444,833 75,000 - - - 574,830

Infrastructure and
- - 50,000 - 409,240 - - 459,240
Security

Gender Equality 100,000 - 25,000 - - - - 125,000

Tourism 7,345 16,950 22,035 14,690 5,650 14,690 14,690 96,050

Kholau Bank Khata

- - - - - 7,800 - 7,800
Abhiyan
Total 1,604,706 2,699,100 5,230,030 5,845,304 5,080,321 2,123,286 1,417,871 24,000,617

C. REGULATORY RESERVE
The Bank has transferred following amounts to Regulatory Reserve following NRB Directive No. 4 issued by Nepal Rastra Bank:
Amount (NPR)
SHORT PROVISION
SHORT
INTEREST FOR POSSIBLE ACTUARIAL LOSS
FY PROVISION ON OTHER TOTAL
RECEIVABLE LOSSES ON RECOGNIZED
NBA
INVESTMENT
2017-18 308,990,085 128,393,301 154,637,535 45,801,803 - 637,822,724

2018-19 (513,535) (128,393,301) (31,286,831) 112,188,330 - (48,005,337)

2019-20 1,812,174 - (37,287,825) 25,333,739 32,216,183 22,074,271

2020-21 (46,337,065) - 97,293,642 13,360,629 (32,216,183) 32,101,023

2021-22 137,388,364 (48,972,726) 115,746,435 204,162,073

2022-23 252,880,025 - 277,974,823 (88,753,234) 95,861,873 537,963,482

2023-24 120,898,518 - 46,010,591 4,703,214 82,449,195 254,061,519

Total 775,118,566 - 458,369,209 228,380,916 178,311,068 1,640,179,760

ANNUAL
306 REPORT 2023-24
5.18FOREIGN CURRENCY BORROWING
The Bank has borrowed USD 55 million from the International Finance Corporation (IFC) on 13 April 2022 for a period of 3 years.
After repayment of principal of USD 11 million, remaining borrowing is USD 44 million reflected under borrowings in Statement of
Financial Position which includes accrued interest receivable as well.
The loan provided by the IFC shall be used by the Bank for MSME and Climate Financing. In addition, the Bank shall also be
using the loan for increasing its portfolio in climate friendly projects which shall be financing of energy efficiency projects such
as solar projects, low carbon mobility projects such as electric vehicles, water efficiency projects, climate smart agriculture,
manufacturing of energy efficient appliances, etc.

5.19 CASH AND CASH EQUIVALENT

As disclosed in Note 4.1: Cash and cash equivalent, there is significant increment in FY 2023-24 in comparison to FY 2022-23.
The major reason for such increment is outstanding amount of Standing Deposit Facility (SDF) of NPR 12.30 billion which was nil
in previous year.
Standing Deposit Facility (SDF) is a monetary policy tool introduced by NRB to absorb excess liquidity from the Banking system.
SDF allows banks to temporarily deposit their surplus funds with NRB and earn an interest on it.

5.20 WEIGHTED AVERAGE INTEREST RATE SPREAD

PARTICULARS RATE (%)

Average Rate of return from loans and advances 9.74

Average Rate of interest on deposits 5.75

Net Spread 3.99

5.21 RECONCILIATION STATUS

The Bank reconciles branches and other agency accounts regularly. The difference has been identified, reviewed and
reconciled and it has been or will be adjusted in due course of business.
NPR in ‘000
RECONCILIATION STATUS LEDGER CREDIT STATEMENT CREDIT LEDGER DEBIT STATEMENT DEBIT

Less than 1 month 106,997 1,387,393 3,398 218,025

More than 1 month to less than 3 months 2,152 67 - 3,494

More than 3 months to less than 6 months - 1 - -

More than 6 months - - - -

Total 109,151 1,387,461 3,398 221,519

5.22 DISCLOSURE OF NON-BANKING ASSETS



As at 15th July 2024, Non-Banking Assets assumed by Bank are as follows:

DATE OF ASSUMING TOTAL NON-
BLACKLISTING
NAME OF BORROWER OF NON-BANKING BANKING ASSETS BLACKLISTING DATE
NUMBER
ASSETS (NPR)
Tej Bahadur Khadka 1999/07/06 30,000
Sumitra Devi Dhungel 2001/05/14 50,000
Binod Shrestha 2014/04/22 37,226,925 5419 2014/04/22
Ramesh Dhakal 2014/05/30 28,510,640 5567 2014/06/27
Hira Acharya 2014/05/30 25,267,023 5568 2014/06/27
Hari Dhital 2014/05/30 6,212,996 5569 2014/06/27
Nanda Lal Dhami/Narendra Kumar Paudel 2014/08/15 12,345,926 5722 2014/07/04
Sarita Lama 2014/08/15 11,822,579 5754 2014/07/07
H.A. Construction Pvt. Ltd 2015/07/21 1,884,614 6416 2015/05/27
K Saud Suppliers 2019/12/24 13,257,040 10561 2018/06/08
Hamro Saptagandaki Deparmental Stores 2021/01/19 28,450,000 17449 2020/03/16
Narayani Engineering Pvt Ltd. 2022/01/13 30,199,922 11188 2018/09/28
Trimurti Kastha Udhyog 2023/01/13 23,680,767 31561 2022/02/06
Pathivara Jewellers 2023/03/20 4,684,000 13959 2019/08/08

ANNUAL 307
REPORT 2023-24
 DATE OF ASSUMING TOTAL NON-
BLACKLISTING
NAME OF BORROWER OF NON-BANKING BANKING ASSETS BLACKLISTING DATE
NUMBER
ASSETS (NPR)
Om Hardware 2023/04/12 40,029,710 39910 2022/07/08
Sanjha Hardware 2023/04/12 9,551,816 39576 2022/07/06
Rajesh Kumar Shah 2023/04/12 5,813,504 59836 2023/03/23
Sanjha Kumari Sah 2023/04/12 5,811,891 59493 2023/03/19
Umesh Prasad Sah 2023/04/12 5,813,910 59494 2023/03/19
Suresh Prasad Sah 2023/04/12 9,308,108 51202 2022/12/19
Dilip Kumar Kesari 2023/04/13 3,836,001 35063 2022/04/25
Sun International Pvt Ltd 2023/04/13 9,083,999 35064 2022/04/25
Radico Metals Pvt Ltd 2023/04/23 15,820,000 35058 2022/04/25

Urlabari Auto Planet & Sagun Sun Chandi

2023/05/19 52,182,619 40349 2023/03/12
Pasal

Raju Neupane and Riddhi Siddhi Electricals 2023/06/04 28,835,763 26868/26867 2021/10/01
Arom Traders 2023/06/12 36,358,215 64686 2023/05/04
Gausiya Galla KharidBikri Kendra 2023/06/15 28,306,791 62799 2023/04/18
New Kamana Suppliers 2023/06/19 22,047,450 66082 2023/05/17
Abin Krishna Shrestha 2023/06/22 4,556,961 65094 2023/05/09
Opinion Trading House 2023/07/10 12,373,489 56608 2023/02/10
G & G Hardware Suppliers 2023/07/12 25,808,228 56375 2023/02/08
Uttam Kumar Upadhayaya 2023/07/15 3,755,891 70091 2023/06/16
Kameshwar Ray Yadav 2023/07/13 9,421,522 21258 2021/01/31
Yes Nirman Sewa 2023/07/13 6,207,371 36516 2022/05/25
Kailashpati General Trading Company Pvt Ltd 2023/11/20 14,554,500 39525 2022/07/06
Harati Maa Enterprises 2024/03/28 60,600,000 69070 2023/06/11
A To Z Electronics House 2024/06/13 93,870,000 81599 2023/08/28

5.23 DISCLOSURE RELATED TO UNPAID DIVIDEND

The detail of unpaid dividend is as under:

PARTICULARS JULY 15, 2024 JULY 16, 2023

FY 2009-10* 1,782,845 4,305,646

FY 2010-11* 1,839,575 1,849,563

FY 2011-12* 1,152,880 1,152,880

FY 2012-13* 1,296,990 1,296,990

FY 2013-14* 1,614,032 1,614,032

FY 2017-18 17,410,790 27,388,123

FY 2018-19 32,007,263 41,121,586

FY 2019-20 8,105,452 11,305,621

FY 2022-23 33,550,353 -

Total 98,760,180 90,034,441

*The dividend amount payable from FY 2066-67 to FY 2070-71 are related to ongoing litigation in court and shares pledged.
Hence, this amount is not deposited in Investors Protection Fund despite requirement of section 183 of Companies Act, 2063 to
deposit in such fund after 5 years of declaration of dividend.

ANNUAL
308 REPORT 2023-24
5.24 DISCLOSURE RELATED TO INTEREST CAPITALIZATION
The Bank has capitalized interest of NPR 381,473,823 during FY 2023-24. The borrower-wise detail of interest capitalized during
the year is as follows:
Amount in NPR

BORROWER NAME 1ST 2ND 3RD 4TH TOTAL

QUARTER QUARTER QUARTER QUARTER CAPITALIZATION

Isuwa Energy Private Limited 10,257,702 10,406,212 12,539,407 14,822,845 48,026,166

Moonlight Hydro Power Company - 2,842,516 2,689,131 2,830,190 8,361,837

Nilgiri Khola Hydro Power Company Limited 22,018,060 21,018,026 20,523,241 - 63,559,327

Peoples Energy Limited - - 11,723,835 14,006,964 25,730,799

Peoples Hydropower Company Private Limited 38,301,624 35,000,000 35,193,975 16,706,245 125,201,844

Samyukta Urja Private Limited 5,894,211 6,541,688 6,972,630 8,136,022 27,544,552

Tundi Power Company Limited - 10,092,954 10,942,309 14,150,128 35,185,391

United Mewa Khola Hydropower Private Limited 7,669,732 10,227,735 12,708,833 17,257,608 47,863,907

Total 84,141,329 96,129,131 113,293,362 87,910,002 381,473,823

5.25 TAXATION ON DISTRIBUTION OF GAIN FROM MERGER & SHARE PREMIUM OF RIGHT SHARES
The Bank had merged with Business Universal Development Bank Limited during FY 2015/16 on a swap ratio 100:55.36 and had
booked gain from merger. Subsequently, the amount was distributed to shareholders in the form of bonus shares. Since the
fund was directly routed through equity, tax was not applicable at that time. Similarly, the Bank had issued right shares in the
past and any right shares not subscribed at that time was auctioned on premium. Share premium of Rs. 256,394,791 collected
on such right shares auction was also distributed to shareholder later in the form of bonus shares. The fiscal year-wise
breakdown income tax liability is as follows:
Amount in NPR

FY SHARE PREMIUM GAIN FROM MERGER TOTAL INCOME TAX LIABILITY

2010-11 13,693,140 - 13,693,140 4,107,942

2015-16 379,979 471,538,321 471,918,300 141,575,490

2016-17 120,230,167 - 120,230,167 36,069,050

2018-19 122,091,505 - 122,091,505 36,627,452

Total 256,394,791 471,538,321 727,933,112 218,379,935

Accordingly, the Bank deposited NPR 218,379,935 in accordance with the provision of section 27 of Finance Act, 2080 related to
income tax liability arising from bargain purchase gain from merger of the entities and share premium collected from auction
of right shares. The deposited amount has been adjusted in opening retained earnings.

Since full text of decision from Supreme Court is yet to be received, the Bank still is looking for possibilities for further procedures
of appeal.

5.26 AGREEMENT WITH KFW DEVELOPMENT BANK

Siddhartha Bank Limited (SBL) has successfully implemented German government supported project entitled “Sustainable
Economic Development in Rural and Semi-Urban Areas – MSME Finance Phase II (SEDRA II)”. The tripartite agreement between
Ministry of Finance Nepal, Nepal Rastra Bank (NRB) and KfW Development Bank under German Development and Finance
Corporation, Germany was signed on 6 November 2020 to implement the project however, the project was officially started
from February 2021 and ended on Mid-July, 2023. The project consisted of two components; refinancing facility of EUR 3 million
and Technical Assistance of EUR 0.5 million.

The objective of the project was to improve access to loan financing for Micro, Small and Medium-sized Enterprises (MSMEs) in
rural and semi-urban areas with financing needs in the ‘Missing Middle’ segment.

ANNUAL 309
REPORT 2023-24
 5.27 COVID RELATED
The details of covid related loans, refinance loan and interest subsidized loan as of July 15, 2024 are as follows:

AS OF JULY 15, 2024

PARTICULARS
NO. OF CUSTOMERS AMOUNT (NPR)
Extension of moratorium period of loan provided to industry or project - -
under construction

Restructured/ rescheduled loan with 5% loan loss provision - -

Enhancement of working capital loan by 20% to COVID affected - -

borrowers

Enhancement of term loan by 10% to COVID affected borrowers - -

Expiry date of additional 20% working capital loan (COVID loan) - -

extended for up to 1 year with 5% provisioning

Expiry date of additional 10% term loan (COVID loan) extended for up to - -
1 year with 5% provisioning

Time extension provided for repayment of principal and interest for up - -

to two years as per clause 41 of NRB directives 2

AS OF JULY 15, 2023

PARTICULARS
NO. OF CUSTOMERS AMOUNT (NPR)
Refinance Loan - -

Business Continuity Loan - -

Refinance Loan (SEDRA) 366 475,291,000

AS OF JULY 15, 2023

PARTICULARS
NO. OF CUSTOMERS AMOUNT (NPR)
Interest subsidized Loan 3,890 6,150,870,745

5.28 RESTRUCTURED LOAN RELATED DISCLOSURE

The details of restructured loans as of July 15, 2024 are as follows:

PARTICULARS NO. OF BORROWERS NO. OF DEALS OVERDUE PRINCIPAL OVERDUE INTEREST

Restructured 735 1,341 2,947,373,957 456,906,225

ANNUAL
310 REPORT 2023-24
5.29. DISCLOSURE OF LOAN LOSS PROVISION
The detail of loan loss provision in FY 2022-23 and FY 2023-24 is as follows:

FY 2023-24 Amount in NPR

CLASSIFICATION LOANS AND ADVANCES LOAN LOSS PROVISION

Pass (1.20%) 182,027,223,356 2,229,112,191

Watch List (5%) 17,092,942,341 857,072,039

Rescheduled/Restructured (12.5%) - -

Substandard (25%) 1,352,504,681 328,988,394

Doubtful (50%) 793,827,727 381,555,200

Loss (100%) 2,271,534,645 2,224,345,113

Total 203,538,032,750 6,021,072,938

Non-Performing Category 4,417,867,052 2,934,888,707

FY 2022-23
CLASSIFICATION LOANS AND ADVANCES LOAN LOSS PROVISION
Pass (1.30%) 174,711,529,321 2,356,819,764

Watch List (5%) 12,331,342,835 616,084,040

Rescheduled/Restructured (12.5%) 2,144,173 268,022

Substandard (25%) 1,143,879,426 280,805,358

Doubtful (50%) 1,821,756,743 900,899,562

Loss (100%) 864,016,986 815,073,619

Total 190,874,669,484 4,969,950,366

Non-Performing Category 3,831,797,328 1,997,046,561

ANNUAL 311
REPORT 2023-24
 312
ANNUAL
REPORT 2023-24
COMPARISON OF UNAUDITED AND AUDITED FINANCIAL STATEMENTS AS OF FY 2023-24

AS PER VARIANCE
AS PER AUDITED
UNAUDITED
STATEMENT OF FINANCIAL POSITION FINANCIAL REASONS FOR VARIANCE
FINANCIAL
STATEMENT AMOUNT IN NPR IN %
STATEMENT
Assets
Cash and cash equivalent 10,437,706,974 22,739,728,891 12,302,021,917 117.86 Variance due to reclass from due from due from Nepal Rastra Bank
Due from Nepal Rastra Bank 21,774,774,285 9,453,753,577 (12,321,020,707) (56.58) Variance due to reclass from due from due from Nepal Rastra Bank

Placements with Bank and Financial

6,562,120,179 6,562,120,179 - -
Institutions

Derivative financial instruments 4,976,896 4,976,896 - -

Other trading assets - 18,998,790 18,998,790 - Variance due to reclass from due from due from Nepal Rastra Bank
Loan and advances to B/FIs 5,767,824,492 5,767,824,492 - -
Loans and advances to customers 195,321,030,763 195,473,382,509 152,351,746 0.08 Variance due to change in loan loss provision amount
Investment securities 47,539,523,640 47,978,959,412 439,435,772 0.92 Variance due to revalaution of investment made in promoter shares
Current tax assets 264,128,274 217,840,347 (46,287,927) (17.52) Variance due to change in income tax expense
Investment in subsidiaries 51,000,000 51,000,000 - -
Investment in associates - - - -
Investment property 727,570,174 727,570,174 - -
Property and equipment 3,495,812,526 3,495,827,216 14,690.00 0.00 Variance due to additional asset booked
Goodwill and Intangible assets 146,146,602 146,146,602 - -
Deferred tax assets - - - -
Other assets 4,759,246,792 4,703,288,420 (55,958,372) (1.18) Variance due to reclass from other assets
Total Assets 296,851,861,596 297,341,417,505 489,555,909 0.16
 AS PER VARIANCE
AS PER AUDITED
UNAUDITED
STATEMENT OF FINANCIAL POSITION FINANCIAL REASONS FOR VARIANCE
FINANCIAL IN AMOUNT IN %
STATEMENT
STATEMENT
Liabilities
Due to Bank and Financial Institutions 3,578,162,810 3,578,162,810 - -
Due to Nepal Rastra Bank 391,922,787 391,922,787 - -
Derivative financial instruments 3,984,885 3,984,885 - -
Deposits from customers 241,329,082,024 241,329,082,024 - -
Borrowing 5,964,375,769 5,964,375,769 - -
Current Tax Liabilities - - - -
Provisions - - - -
Deferred tax liabilities 520,038,853 669,639,275 149,600,421 28.77 Variance due to change in deferred tax liability
Other liabilities 5,734,647,925 5,672,397,480 (62,250,445) (1.09) Variance due to reclass from other liabilities
Debt securities issued 11,662,559,000 11,662,559,000 - -
Subordinated Liabilities - - - -
Total liabilities 269,184,774,054 269,272,124,030 87,349,976 0.03
Equity
Share capital 14,089,980,190 14,089,980,190 - -
Share premium - - - -
Variance due to change in net profit and amount to be transferred to
Retained earnings 366,660,316 580,361,617 213,701,300 58.28
other reserves
Variance due to change in net profit and amount to be transferred to
Reserves 13,210,447,036 13,398,951,668 188,504,632 1.43
other reserves
Total equity 27,667,087,542 28,069,293,475 402,205,933 1.45
Total liabilities and equity 296,851,861,596 297,341,417,505 489,555,909 0.16

REPORT 2023-24
313ANNUAL
 314
ANNUAL
REPORT 2023-24
AS PER VARIANCE
AS PER AUDITED
UNAUDITED
STATEMENT OF FINANCIAL POSITION FINANCIAL REASONS FOR VARIANCE
FINANCIAL AMOUNT IN NPR IN %
STATEMENT
STATEMENT
Interest income 25,744,837,768 25,716,027,983 (28,809,784) (0.11) Variance due to additional interest accrual reversal made
Interest expense 17,751,256,959 17,785,958,012 34,701,053 0.20 Variance due to reclass of expense from fee and commission expense
Net interest income 7,993,580,808 7,930,069,971 (63,510,837) (0.79) Variance due to above reasons
Fee and commission income 1,814,482,351 1,815,388,806 906,454 0.05 Variance due to additional income booked

Variance due to reclass of expense from fee and commission expense and
Fee and commission expense 422,667,743 389,054,337 (33,613,406) (7.95)
additional expense booked

Net fee and commission income 1,391,814,608 1,426,334,469 34,519,861 2.48 Variance due to above reasons

Net interest, fee and commission income 9,385,395,416 9,356,404,440 (28,990,976) (0.31) Variance due to above reasons

Net trading income 230,227,768 239,844,593 9,616,824 4.18 Variance due to reclass of income from interest income
Other operating income 381,052,402 381,052,402 - -
Total operaing income 9,996,675,587 9,977,301,435 (19,374,151) (0.19) Variance due to above reasons
Impairment charge/(reversal) for loans
1,231,688,047 1,051,123,141 (180,564,906) (14.66) Variance due to reversal of impairment charges
and other losses
Net operating income 8,764,987,540 8,926,178,295 161,190,754 1.84 Variance due to above reasons
Personnel expenses 2,935,126,414 2,977,901,219 42,774,804 1.46 Variance due to change in actuarial valuation
Other operating expenses 982,609,210 985,628,185 3,018,974 0.31 Variance due to additional expense booked
Depreciation & Amortisation 478,149,579 478,149,579 - -
Operating profit 4,369,102,337 4,484,499,312 115,396,975 2.64 Variance due to above reasons
Non operating income 11,264,646 11,264,646 - -
Non operating expense 20,261,898 19,997,998 (263,900) - Variance due to reclass of expense
Profit before tax 4,360,105,085 4,475,765,961 115,660,875 2.65 Variance due to above reasons
Income tax 1,344,569,432 1,395,737,277 51,167,844 3.81 Variance due to tax effect of above mentioned adjustments
Profit /(loss) for the period 3,015,535,653 3,080,028,684 64,493,030 2.14

Variance due to revaluation of promoter shares and change in actuarial

Other comprehensive income 154,929,022 492,641,925 337,712,902 217.98
valuation

Total comprehensive income 3,170,464,674 3,572,670,608 402,205,934 12.69

Distributable Profit
Net profit/(loss) as per profit or loss 3,015,535,653 3,080,028,684 64,493,030 2.14

Add/Less: Regulatory adjustment as

(1,537,891,041) (2,269,260,209) (731,369,168) 47.56
per NRB Directive

Free profit/(loss) after regulatory

1,477,644,612 810,768,475 (666,876,137) (45.13)
adjustments
PRINCIPAL INDICATORS

FY FY FY FY FY
S.N. PARTICULARS INDICATORS
2019-20 2020-21 2021-22 2022-23 2023-24
1 Net Profit/Total Income Percent 12.48% 15.77% 12.53% 10.59% 10.94%

2 Earning per share

Basic earning per share NPR 19.55 22.79 20.60 22.48 21.86

Diluted earning per share NPR 19.55 22.79 20.60 22.48 21.86

3 Market price per share NPR 296.00 504.00 303.00 253.00 283.00

4 Price/Earning Ratio Ratio 15.14 19.35 13.07 11.26 12.95

5 Dividend on Bonus per share Percent 12.00% 14.25% 12.50% 0.00% 0.00%

6 Cash dividend Percent 3.00% 0.75% 0.66% 4.21% 4.00%

7 Interest Income/Loan and Advances Percent 11.14% 8.18% 9.85% 12.34% 10.59%

8 Employee expense/Total Operating Expenses Percent 62.19% 63.88% 63.87% 62.48% 61.64%

9 Interest Expenses/Total Deposit & Borrowing Percent 7.28% 5.54% 6.73% 8.49% 7.40%

10 Exchange Income/Total Income Percent 2.68% 2.73% 2.16% 0.96% 1.22%

11 Staff Bonus/ Total Employee Expenses Percent 16.12% 19.55% 17.62% 17.78% 16.70%

12 Net Profit/ Loan and Advances Percent 1.65% 1.70% 1.54% 1.63% 1.49%

13 Net Profit/ Total Assets Percent 1.26% 1.25% 1.10% 1.11% 1.06%

14 Total loans and advances/Total deposit Percent 89.04% 90.60% 96.08% 84.94% 84.63%

15 Total Operating Expenses/Total Assets Percent 2.03% 1.62% 1.59% 1.60% 1.62%

16 Capital Adequacy Ratio

a) Common Equity Tier 1 Capital Percent 9.26% 8.52% 9.04% 9.37% 9.38%

b) Core Capital Percent 9.26% 8.52% 9.04% 9.37% 9.38%

c) Supplementary Capital Percent 3.91% 4.84% 3.96% 3.10% 2.51%

d) Total Capital Fund Percent 13.17% 13.36% 13.00% 12.47% 11.88%

17 Cash Reserve Ratio (CRR) Percent 5.03% 3.54% 3.23% 4.06% 4.01%

18 NPAs/Total loan and advances Percent 1.38% 1.00% 1.07% 2.01% 2.17%

19 Base Rate Percent 9.03% 7.16% 9.45% 9.91% 8.11%

20 Weighted Average Interest Rate Spread Percent 4.81% 3.70% 4.37% 3.99% 3.99%

21 Book net worth (Rs. in billion) NPR 16.01 20.40 21.59 25.31 28.07

22 Total Shares Nos. 97,877,671 109,622,992 125,244,268 140,899,802 140,899,802

23 Total employees Nos. 1,887 1,862 1,893 1,969 1,982

24 Others

Per Employee Business (NPR In Million) NPR 146.20 189.60 203.50 214.69 228.14

Per Employee Income (NPR In Million) NPR 9.10 9.72 12.24 15.19 14.21

Per Employee Net Profit (NPR In Million) NPR 1.14 1.53 1.53 1.61 1.55

Per Employee Expenditure (NPR In Million) NPR 1.14 1.27 1.42 1.45 1.50

Return On Equity % 13.81% 15.68% 13.82% 13.50% 11.54%

Book Value Per Share NPR 163.58 186.11 172.45 179.61 199.21

Total Assets/ Total Equity Ratio 10.65 11.23 12.24 11.30 10.59

Employee expense/Total Income Percent 12.55% 13.08% 11.59% 9.54% 10.57%

Number of branches (including extension
counters) Nos. 186 189 190 196 196

ANNUAL 315
REPORT 2023-24
 FINANCIALS OF
SIDDHARTHA CAPITAL
LIMITED

ANNUAL
316 REPORT 2023-24
 SUBSIDIARY COMPANY

SIDDHARTHA CAPITAL LIMITED

Siddhartha Capital Limited is a subsidiary company of Siddhartha Bank Limited. It has been operating since 2012 and
is located in Narayanchour, Naxal, Kathmandu. The company has a paid-up capital of NPR 200 million, of which 51% is
owned by the Bank. Siddhartha Capital Limited has played a significant role in the development of mutual funds in Nepal.
Following the successful operation of mutual funds, the company entered the merchant banking business in 2072 B.S.,
offering services such as public issue management, underwriting, portfolio management, institutional advisory, depository
participant services, and share registrar services.

The company is licensed by the Nepal Securities Board and CDS and Clearing Limited to operate as a Depository
Participant (DP). It is committed to enhancing customer satisfaction, meeting organizational needs, and addressing
the growing demand for investment banking services in Nepal. Under the Siddhartha Mutual Fund, Siddhartha Capital
manages various schemes including Siddhartha Equity Fund, Siddhartha Investment Growth Scheme 2, Siddhartha
Investment Growth Scheme 3, and Siddhartha Managed Investment Plan.

Currently, the Siddhartha Equity Fund, with a base size of NPR 1.50 billion, has been operating for the past six years.
Siddhartha Investment Growth Scheme 2, with a base size of NPR 1.20 billion, has been in operation for four years. Similarly,
Siddhartha Investment Growth Scheme 3, with a base size of NPR 805.9 million, has been running for one year. The
Siddhartha Systematic Investment Scheme , which began with a base size of NPR 200 million, has been in operation for
three years and had grown to approximately NPR 877.1 million by the end of mid July 2024.

Siddhartha Equity Fund, Siddhartha Investment Growth Scheme 2, and Siddhartha Investment Growth Scheme 3 are listed
and actively traded on the Nepal Stock Exchange (NEPSE), while the Siddhartha Systematic Investment Scheme is traded
directly through Siddhartha Capital Limited.

Email : info@siddharthacapital.com
Website: www.siddharthacapital.com
Phone numbers: +977-01-5970747, 4520929

ANNUAL 317
REPORT 2023-24
 ANNUAL
318 REPORT 2023-24
 ANNUAL 319
REPORT 2023-24
 ANNUAL
320 REPORT 2023-24
 STATEMENT OF FINANCIAL POSITION

As at July 15, 2024

SCHEDULES CURRENT YEAR PREVIOUS YEAR

PARTICULARS
NPR NPR
Assets
Cash and Cash Equivalents 1 358,427,726 364,901,874
Investment Securities 2 369,298,289 357,799,055
Other Financial Assets 3 51,693,100 29,952,721
Other Assets 4 3,307,996 3,468,589
Property & Equipment 5 25,034,138 31,426,432
Intangible Assets 6 1,349,600 1,612,026
Current Tax Assets 7 1,704,372 4,320,607
Deferred Tax Assets 11 12,885,540 12,836,567
Total Assets 823,700,760 806,317,871
Liabilities
Due to Public 8 288,200,049 280,799,616
Other Financial Liabilities 9 39,492,727 37,335,800
Other Liabilities 10 32,302,566 37,339,227
Current Tax Liabilities 7 - -
Deferred Tax Liabilities 11 - -
Total Liabilities 359,995,342 355,474,643
EQUITY
Share Capital 12 200,000,000 200,000,000
Retained Earnings 13 191,015,913 181,410,607
Reserves & Surplus 14 72,689,504 69,432,621
Total Equity 463,705,417 450,843,228
Total Liabilities and Equity 823,700,760 806,317,871

SCHEDULES 1-24 FORM THE INTEGRAL PART OF THE FINANCIAL STATEMENTS.

RUPESH RAUT RAHUL AGRAWAL MOHIT KEDIA As per our attached report of even date
HEAD, FINANCE & OPERATIONS DIRECTOR CHAIRMAN On Behalf of S.R. Pandey & Co.

MUKTI NATH SUBEDI SHER BAHADUR BUDHATHOKI ARUN RAUT, FCA

CHIEF OPERATING OFFICER DIRECTOR PARTNER

SANDEEP KARKI RISHI RAJ GAUTAM

CHIEF EXECUTIVE OFFICER INDEPENDENT DIRECTOR

Date: September 09, 2024 KIRAN THAPA

Place: Kathmandu, Nepal INDEPENDENT DIRECTOR

ANNUAL 321
REPORT 2023-24
 STATEMENT OF PROFIT OR LOSS

For the year ended July 15, 2024

SCHEDULES CURRENT YEAR PREVIOUS YEAR

PARTICULARS
NPR NPR
Income

Income from Merchant Banking Activity 15 97,948,247 75,949,722

Income from Mutual Fund operations 16 68,456,313 53,377,475

Interest Income 17 27,047,055 43,938,733

Other Income 18 8,518,515 20,979,632

Foreign exchange (gain)/loss 19 272 1,573

Net gain/(loss) on financial investments measured at FVTPL 20 2,946,946 (2,992,278)

Total Income 204,917,347 191,254,859

EXPENSES
Personnel Expenses 21 51,784,054 44,061,287

Depreciation on Property and Equipment 5 9,364,036 8,233,924

Amortization of Intangible Assets 6 695,747 639,353

Other Operating Expenses 22 48,176,986 48,322,947

Total Expenses 110,020,823 101,257,510

Profit Before Tax from Continuing Operations 94,896,524 89,997,349

Income Tax Expenses 28,419,115 27,614,508

Current Tax 26,918,707 24,193,513

Previous Year Tax Expenses - 576,377

Current Year Tax Expenses 26,918,707 23,617,136

Deferred Tax 1,500,408 3,420,995

Profit For the Year 66,477,410 62,382,841

SCHEDULES 1-24 FORM THE INTEGRAL PART OF THE FINANCIAL STATEMENTS.

RUPESH RAUT RAHUL AGRAWAL MOHIT KEDIA As per our attached report of even date
HEAD, FINANCE & OPERATIONS DIRECTOR CHAIRMAN On Behalf of S.R. Pandey & Co.

MUKTI NATH SUBEDI SHER BAHADUR BUDHATHOKI ARUN RAUT, FCA

CHIEF OPERATING OFFICER DIRECTOR PARTNER

SANDEEP KARKI RISHI RAJ GAUTAM

CHIEF EXECUTIVE OFFICER INDEPENDENT DIRECTOR

Date: September 09, 2024 KIRAN THAPA

Place: Kathmandu, Nepal INDEPENDENT DIRECTOR

ANNUAL
322 REPORT 2023-24
 STATEMENT OF CASH FLOWS

For the year ended July 15, 2024

CURRENT YEAR PREVIOUS YEAR
PARTICULARS
NPR NPR
Operating Activities

(a) Cash Flow from Operating Activities 27,892,470 (65,171,882)

1. Cash Received from Income 169,215,068 132,354,138

1.1 Income from Merchant Banking Operation 97,948,247 75,949,723

1.2 Income from Mutual Fund Operation 68,456,313 53,377,475

1.3 Interest Income 1,010,054 1,776,311

1.4 Other Income 1,800,454 1,250,629

2. Cash Payment 124,263,512 123,615,085

2.1 Personnel Expenses 51,784,054 44,061,287

2.2 Office Operating Expenses 47,736,575 48,054,942

2.3 CSR Expenses 440,411 268,005

2.4 Income Tax Paid 24,302,472 31,230,852

Cash Flow before changes in Working Capital 44,951,556 8,739,053

(Increase)/Decrease in Current Assets (21,579,785) 6,529,029

1. (Increase)/Decrease in Financial Assets (21,082,095) 7,710,442

2. (Increase)/Decrease in Other Assets (497,690) (1,181,413)

Increase/(Decrease) in Current Liabilities 4,520,699 (80,439,964)

1. Increase/(Decrease) in Public Dues 7,400,433 (56,211,001)

2. Increase/(Decrease) in Other Liabilities (2,879,734) (24,228,964)

(b) Cash Flow from Investment Activities 15,633,111 78,448,847

1. (Increase)/Decrease in Investment Securities (10,764,809) 35,753,283

2. Purchase of property and equipment (3,405,063) (4,889,994)

3. Receipt from the sale of property and equipment - (0.63)

4. Interest received 26,037,001 42,162,423

5. Dividend received 3,765,982 5,423,136

(c) Cash Flow from Financing Activities (50,000,000) (50,000,000)

1. Receipt from issue of shares - -

2. Share Premium - -

3. Payment of Dividend (50,000,000) (50,000,000)

(d) Net increase/(decrease) in cash and cash equivalents (6,474,419) (36,723,035)

(e) Cash and cash equivalents at the beginning of the year 364,901,874 401,623,336

Effect of exchange rate fluctuation on cash and cash

272 1,573
equivalents held

(f) Cash and cash equivalents at the end of the year 358,427,726 364,901,874

RUPESH RAUT RAHUL AGRAWAL MOHIT KEDIA As per our attached report of even date
HEAD, FINANCE & OPERATIONS DIRECTOR CHAIRMAN On Behalf of S.R. Pandey & Co.

MUKTI NATH SUBEDI SHER BAHADUR BUDHATHOKI ARUN RAUT, FCA

CHIEF OPERATING OFFICER DIRECTOR PARTNER

SANDEEP KARKI RISHI RAJ GAUTAM

CHIEF EXECUTIVE OFFICER INDEPENDENT DIRECTOR

Date: September 09, 2024 KIRAN THAPA

Place: Kathmandu, Nepal INDEPENDENT DIRECTOR
ANNUAL 323
REPORT 2023-24
 STATEMENT OF OTHER COMPREHENSIVE INCOME

For the year ended July 15, 2024

CURRENT YEAR PREVIOUS YEAR
PARTICULARS
NPR NPR
Profit for the year 66,477,410 62,382,841

Gain/(loss) on financial investments measured at FVOCI (5,164,601) 1,861,659

Total other comprehensive income /(loss) (5,164,601) 1,861,659

Income tax income /(expense) relating to above items 1,549,380 (558,498)

Net Comprehensive Income (3,615,221) 1,303,161

Total comprehensive income for the year, net of tax 62,862,189 63,686,002

RUPESH RAUT RAHUL AGRAWAL MOHIT KEDIA As per our attached report of even date
HEAD, FINANCE & OPERATIONS DIRECTOR CHAIRMAN On Behalf of S.R. Pandey & Co.

MUKTI NATH SUBEDI SHER BAHADUR BUDHATHOKI ARUN RAUT, FCA

CHIEF OPERATING OFFICER DIRECTOR PARTNER

SANDEEP KARKI RISHI RAJ GAUTAM

CHIEF EXECUTIVE OFFICER INDEPENDENT DIRECTOR

Date: September 09, 2024 KIRAN THAPA

Place: Kathmandu, Nepal INDEPENDENT DIRECTOR

ANNUAL
324 REPORT 2023-24
 STATEMENT OF CHANGES IN EQUITY
For the year ended to July 15, 2024

TOTAL
SHARE GENERAL RETAINED FAIR VALUE CSR
PARTICULARS SHAREHOLDERS’
CAPITAL RESERVE EARNINGS RESERVE RESERVE
FUNDS

Balance as at 17 July 2022 200,000,000 59,607,852 175,621,873 - 1,927,501 437,157,226

Adjustment - - - - - -

Adjusted Balance as at 17
July 2022 200,000,000 59,607,852 175,621,873 - 1,927,501 437,157,226

Issue of Share Capital - - - - - -

Dividend Declared & Paid - - (50,000,000) - - (50,000,000)

Transfer to General
Reserve - 6,238,284 (6,238,284) - - -

Transfer to CSR Reserve - - (623,828) - 623,828 -

Transfer from CSR Reserve - - 268,005 - (268,005) -

Net profit for the year - - 62,382,841 - - 62,382,841

Fair valuation of financial

investments measured at - - - - 1,303,161
FVOCI (net of tax) 1,303,161
Bonus share issued - - - - - -
Balance as at 16 July 2023 200,000,000 65,846,136 181,410,607 1,303,161 2,283,324 450,843,228

Balance as at 17 July 2023 200,000,000 65,846,136 181,410,607 1,303,161 2,283,324 450,843,228

Adjustment - - - - - -
Adjusted Balance as at 17
July 2023 200,000,000 65,846,136 181,410,607 1,303,161 2,283,324 450,843,228

Issue of Share Capital - - - - - -

Dividend Declared & Paid - - (50,000,000) - - (50,000,000)

Transfer to General
Reserve - 6,647,741 (6,647,741) - - -

Transfer to CSR Reserve - - (664,774) - 664,774 -

Transfer from CSR Reserve - - 440,411 - (440,411) -

Net profit for the period - - 66,477,410 - - 66,477,410

Fair valuation of financial
investments measured at - - - (3,615,221) - (3,615,221)
FVOCI (net of tax)

Bonus share issued - - - - - -

Balance as at 15 July 2024 200,000,000 72,493,877 191,015,913 (2,312,060) 2,507,687 463,705,417

RUPESH RAUT RAHUL AGRAWAL MOHIT KEDIA As per our attached report of even date
HEAD, FINANCE & OPERATIONS DIRECTOR CHAIRMAN
On Behalf of S.R. Pandey & Co.
MUKTI NATH SUBEDI SHER BAHADUR BUDHATHOKI ARUN RAUT, FCA
CHIEF OPERATING OFFICER DIRECTOR PARTNER

SANDEEP KARKI RISHI RAJ GAUTAM

CHIEF EXECUTIVE OFFICER INDEPENDENT DIRECTOR

Date: September 09, 2024 KIRAN THAPA

Place: Kathmandu, Nepal INDEPENDENT DIRECTOR

ANNUAL 325
REPORT 2023-24
 Schedule 1
CASH & CASH EQUIVALENTS

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR
S.N. PARTICULARS
NPR NPR
1 Cash Balance - -

2 Balance in Call Account 358,417,453 364,888,691

3 SCL-Dollar Card-FCY 10,273 13,183

Total 358,427,726 364,901,874

Schedule 2
INVESTMENT SECURITIES

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR
S.N. PARTICULARS
NPR NPR
1 Investment Securities measured at Amortized Cost 83,976,000 136,476,000

2 Investment in Securities measured at FVTPL 178,571,731 109,407,897

3 Investments in Securities measured at FVTOCI 106,750,558 111,915,159

Total 369,298,289 357,799,055

Schedule 2(A)
INVESTMENT SECURITIES MEASURED AT AMORTIZED COST

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR
S.N. PARTICULARS
NPR NPR
1 Fixed Deposits with Banks 76,000,000 128,500,000

2 Investment in Debentures 7,976,000 7,976,000

Total 83,976,000 136,476,000

Schedule 2(B)
INVESTMENT IN SECURITIES MEASURED AT FVTPL

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR
S.N. PARTICULARS
NPR NPR
1 Investments in Quoted Equities 75,442,628 39,971,001

2 Investments in Unquoted Equities 5,993,664 -

3 Investments in Quoted Mutual Funds 48,585,439 46,936,896

4 Investments in Unquoted Mutual Funds 48,550,000 22,500,000

Total 178,571,731 109,407,897

Schedule 2(C)
INVESTMENTS IN SECURITIES MEASURED AT FVTOCI

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR
S.N. PARTICULARS
NPR NPR
1 Investments in Unquoted Funds 50,000,000 50,000,000

2 Investments in Quoted Mutual Funds-OCI 56,750,558 61,915,159

Total 106,750,558 111,915,159

ANNUAL
326 REPORT 2023-24
 Schedule 3
OTHER FINANCIAL ASSETS

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR
S.N. PARTICULARS
NPR NPR
1 Account Receivables 6,584 5,229

2 Sundry Debtors 20,831,839 3,340,551

3 Security Deposit for DP 100,000 100,000

4 Staff Loan 11,880,719 9,792,402

5 Deposit at Aqua Mineral/Petrol 200,000 200,000

6 Fund Management & Depository Fee Receivable - SEF 6,447,345 6,638,402

7 Fund Management & Depository Fee Receivable - SIGS 2 5,189,886 5,371,062

8 Fund Management & Depository Fee Receivable - SIGS 3 3,778,935 3,006,854

9 Fund Management & Depository Fee Receivable - SSIS 3,257,791 1,498,221

Total 51,693,100 29,952,721

Schedule 4
OTHER ASSETS

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR
S.N. PARTICULARS
NPR NPR
1 Stock of Stationery 93,802 68,904

2 Prepayments 2,540,846 2,741,402

3 Staff Advances 44,417 143,961

4 Prepaid Staff Expense 628,931 514,322

Total 3,307,996 3,468,589

ANNUAL 327
REPORT 2023-24
 328
ANNUAL
REPORT 2023-24
Schedule 5
PROPERTY AND EQUIPMENT

As at July 15, 2024

COMPUTER RIGHT OF USE

FURNITURE AND ELECTRICAL AND LEASEHOLD
BUILDINGS AND OFFICE MOTOR VEHICLES (ROU) LEASE TOTAL
FIXTURES ACS ASSETS
PARTICULARS EQUIPMENT ASSETS

NPR NPR NPR NPR NPR NPR NPR NPR

Cost:

At 16 July 2023 - 1,854,947 12,729,578 7,181,596 7,580,652 15,539,850 34,038,089 78,924,712

Additions - 257,603 1,405,624 804,900 503,615 - - 2,971,742

Disposals - - - - 225,000 - - 225,000

At 15 July 2024 - 2,112,550 14,135,202 7,986,496 7,859,267 15,539,850 34,038,089 81,671,454

Accumulated Depreciation

At 16 July 2023 - 1,771,129 11,061,527 3,739,925 7,426,727 10,532,082 12,966,891 47,498,281

Additions - - - - - - -

Disposals - - - - 225,000 - - 225,000.00

Depreciation charge for the period - 35,947 565,930 767,075 192,579 1,319,059 6,483,445 9,364,036

At 15 July 2024 - 1,807,076 11,627,457 4,507,000 7,394,306 11,851,141 19,450,336 56,637,317

Net book value:

At 16 July 2023 - 83,818 1,668,051 3,441,671 153,925 5,007,768 21,071,198 31,426,432

At 15 July 2024 - 305,474 2,507,745 3,479,496 464,961 3,688,710 14,587,752 25,034,138

 Schedule 6
INTANGIBLE ASSETS

As at July 15, 2024

PARTICULARS AMOUNT

Cost:

At 16 July 2023 5,310,845

Additions 433,320

Disposals -

Amortizations -

At 15 July 2024 5,744,165

Accumulated Amortization

At 16 July 2023 3,698,819

Additions 695,747

Disposals -

At 15 July 2024 4,394,566

Net book value:

At 16 July 2023 1,612,026

At 15 July 2024 1,349,600

Schedule 7
CURRENT TAX ASSETS / (LIABILITIES)

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR

PARTICULARS
NPR NPR

1 Advance Income Tax 28,623,079 27,937,743

2 Income Tax Payable 26,918,707 23,617,136

Total 1,704,372 4,320,607

Schedule 8
DUE TO PUBLIC

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S.N. PARTICULARS
NPR NPR

1 RTS and Custodial Dividend Payable 276,495,804 267,820,343

2 Advance received/Transfer from DP clients 11,704,246 12,979,274

Total 288,200,049 280,799,616

ANNUAL 329
REPORT 2023-24
 Schedule 9
OTHER FINANCIAL LIABILITIES

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S.N. PARTICULARS
NPR NPR

1 Sundry Creditors 8,615,292 5,449,898

2 Audit Fee Payable 183,975 167,250

3 Meeting Allowance Payable 65,875 110,500

4 Retention 79,120 61,920

5 Mutual Fund Redemption payable 29,189,683 29,981,803

6 Staff Welfare 1,358,783 1,564,429

Total 39,492,727 37,335,800

Schedule 10
OTHER LIABILITIES

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S.N. PARTICULARS
NPR NPR

1 Staff Bonus Payable 10,544,058 9,999,705

2 TDS Payable 570,718 756,770

3 Employee Benefit Obligation 4,457,470 3,274,963

4 Finance Lease Obiligations (NFRS) 16,730,320 23,307,788

Total 32,302,566 37,339,227

Schedule 11
DEFERRED TAX ASSETS/(LIABILITIES)

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S.N. PARTICULARS
NPR NPR

1 Deferred Tax Assets 12,885,540 12,836,567

2 Deferred Tax Liabilities - -

Total 12,885,540 12,836,567

ANNUAL
330 REPORT 2023-24
 Schedule 12
SHARE CAPITAL

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR
PARTICULARS
NPR NPR

Authorized Capital

2,000,000 Ordinary shares of NPR 100 each 200,000,000 200,000,000

Issued Capital

2,000,000 Ordinary shares of NPR 100 each 200,000,000 200,000,000

Subscribed & Paid up Capital

2,000,000 Ordinary shares of NPR 100 each 200,000,000 200,000,000

Total 200,000,000 200,000,000

Schedule 13
RETAINED EARNINGS

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S.N. PARTICULARS
NPR NPR

1 Retained Earnings 191,015,913 181,410,607

Total 191,015,913 181,410,607

Schedule 14
RESERVES & SURPLUS

As at July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S.N. PARTICULARS
NPR NPR

1 General Reserve Fund 72,493,877 65,846,136

2 Corporate Social Responsibility Reserve 2,507,687 2,283,324

3 Fair Value Reserve (2,312,060) 1,303,161

Total 72,689,504 69,432,621

ANNUAL 331
REPORT 2023-24
 Schedule 15
INCOME FROM MERCHANT BANKING ACTIVITY

For the year ended July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S. N. PARTICULARS
NPR NPR

1 Income from Share Registrar 7,684,042 5,516,539

Election Charge 25,000 30,000

Interest on Call Deposit (DP) 3,832,485 2,893,805

Name Transfer Fee 710 715

Notice Publication Charges 84,800 98,580

Other Income from RTS 1,241,937 -

RTS Fee 2,267,807 2,493,439

Debenture Trustee Fee 231,303 -

2 Income from DP 73,776,868 51,491,921

Account Opening Fee 626,000 427,900

Account Operation Annual Fee 33,201,400 22,343,500

Death Transfer Fee 169,820 243,631

Family Transfer Fee 1,037,342 226,067

Mero Share Fee 13,091,950 11,980,300

Other Income from DP 623,146 320,047

Securities Transfer Fee 24,546,150 15,634,825

Security Pledge Fee 481,060 315,650

3 Income from Issue Management 4,340,962 18,009,363

ASBA Fee 2,185,609 9,934,852

Collection Commission 3,584 18,211

Issue Management Fee 1,550,000 4,935,598

Form Fee 3,536 124,276

Interest Income 569,606 1,813,485

Other Income 14,281 1,057,304

Prospectus Preparation Charge 10,000 10,000

Refund Commission - 8,969

Data Entry & Numbering Charge 4,346 106,668

4 Income from Underwriting 10,045,119 422,500

5 Income from Portfolio Management 1,985,647 509,400

Annual fee 1,928,343 504,206

Performance fee 57,304 5,194

6 Income from Corporate Advisory 115,609 -

Grand Total 97,948,247 75,949,723

ANNUAL
332 REPORT 2023-24
 Schedule 16
INCOME FROM MUTUAL FUND OPERATIONS

For the year ended July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S. N. PARTICULARS
NPR NPR

1 Income from Fund Management 60,402,629 47,097,772

Fund Management Income From SEF 21,864,953 22,524,584

Fund Management Income From SIGS 2 17,555,239 18,109,135

Fund Management Income From SIGS 3 12,511,466 2,611,455

Fund Management Income From SSIS 8,470,971 3,852,598

2 Income from Depository 8,053,684 6,279,703

Depository Income From SEF 2,915,327 3,003,278

Depository Income From SIGS 2 2,340,699 2,414,551

Depository Income From SIGS 3 1,668,195 348,194

Depository Income From SSIS 1,129,463 513,680

Grand Total 68,456,313 53,377,475

Schedule 17
INTEREST INCOME

For the year ended July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S. N. PARTICULARS
NPR NPR

1 Interest from FD 25,234,461 41,365,148

2 Interest from Call Deposit 1,010,054 1,776,311

3 Interest from Debentures/Bonds 802,540 797,275

Total 27,047,055 43,938,733

Schedule 18
OTHER INCOME

For the year ended July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S. N. PARTICULARS
NPR NPR

1 Interest on Staff Loan 1,030,720 1,090,625

2 Profit on Sale of Fixed Assets 25,000 -

3 Other Operating income 292,413 -

4 Capital Gain/(Loss) 2,952,079 14,305,867

5 Dividend Income from Mutual Funds 3,765,982 5,423,136

6 Other Dividend Income 452,321 160,005

Total 8,518,515 20,979,632

ANNUAL 333
REPORT 2023-24
 Schedule 19
FOREIGN EXCHANGE GAIN/(LOSS)

For the year ended July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S. N. PARTICULARS
NPR NPR

1 Gain/Loss on Foreign Exchange 272 1,573

Total 272 1,573

Schedule 20
NET GAIN/(LOSS) ON FINANCIAL INVESTMENTS

For the year ended July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S. N. PARTICULARS
NPR NPR

Net gain/(loss) on financial investments

1 2,946,946 (2,992,278)
measured at FVTPL

Total 2,946,946 (2,992,278)

Schedule 21
PERSONNEL EXPENSES

For the year ended July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S. N. PARTICULARS
NPR NPR

1 Amortization of prepaid staff expense 286,172 286,662

2 Dashain Allowance 2,179,174 1,710,371

3 Forced Leave Allowances 1,115,980 978,191

4 Staff Insurance Premium 444,504 381,984

5 Intern Expenses 59,800 -

6 Leave Expenses 1,641,996 976,698

7 Gratuity Expenses 1,528,841 1,222,832

8 Medical Allowance 370,400 325,987

9 Overtime Expenses 46,313 20,207

10 Provident Fund Expenses 1,835,987 1,468,058

11 Salary and Allowance 31,265,368 25,737,837

12 Staff Bonus Expenses 10,544,058 9,999,705

13 Staff Refreshment Expenses 293,463 333,555

14 Uniform Expenses 172,000 619,200

Total 51,784,054 44,061,287

ANNUAL
334 REPORT 2023-24
 Schedule 22
OTHER OPERATING EXPENSES

For the year ended July 15, 2024

CURRENT YEAR PREVIOUS YEAR

S. N. PARTICULARS
NPR NPR
1 Direct Expenses 26,951,796 27,957,510

Issue Management Expenses 190,024 7,692,979

Licensing/Renewal Fee 855,000 845,000

RTS Expenses 467,820 299,404

CDS Commission 15,847,622 11,994,517

SBL DP Commission 3,379,320 2,660,880

SEBON Commission 6,212,009 4,464,729

2 General Operating Expenses 21,225,191 20,365,437

Annual General Meeting Expenses 351,675 198,966

Annual Maintenance Charge 999,758 622,583

Audit Fees (Compliance) 28,250 -

Audit Fees (External) 186,450 169,500

Audit Fees (Labour) 28,250 28,250

Audit Fees (Internal) 226,000 197,750

Consultancy Fee 325,000 432,500

Corporate Social Responsibility Expenses 440,411 268,005

Email and Internet Expenses 901,494 736,881

Electricity and Water 990,196 876,768

Flower & Decoration Expenses 132,000 132,000

Fuel (Petrol) 1,092,442 981,160

HR Recruitment Expenses 69,321 7,429

Insurance Premium 367,422 355,981

Interest Expenses Finance Lease (NFRS) 2,089,198 2,707,805

IT Expenses 1,074,044 709,569

Janitorial Expenses 1,224,004 1,091,918

Kitchen Expenses 292,045 250,295

Marketing & Other Activities Expenses 1,927,382 4,527,715

Meeting Allowance 840,000 757,500

Membership Fee Expenses 42,500 42,500

Other Audit Expenses 29,910 28,769

Other Meeting related Expenses 377,636 -

Other Expenses - Refreshment 89,347 41,660

Other Office Expenses 350,502 693,645

Outsourcing Expenses 2,427,701 1,886,113

Periodicals and Books 51,334 46,325

ANNUAL 335
REPORT 2023-24
 CURRENT YEAR PREVIOUS YEAR
S. N. PARTICULARS
NPR NPR
Postage and Communication Expenses 263,745 148,757

Printing and Stationery 1,050,722 711,451

Rates & Taxes 92,283 38,415

Repair and Maintenance 350,128 279,395

Security Expenses 999,981 887,184

Training Expenses 1,210,462 208,171

Travelling and Communication Allowance 300,000 300,000

Website Development Expenses 3,597 478

Total 48,176,986 48,322,947

ANNUAL
336 REPORT 2023-24
SIGNIFICANT ACCOUNTING POLICIES
AND NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 15 JULY 2024

Schedule 23

1. REPORTING ENTITY
1.1. GENERAL INFORMATION 1.3. PRINCIPAL ACTIVITIES AND OPERATIONS
Siddhartha Capital Limited (SCL) is the subsidiary of Siddhartha Capital Limited obtained license for commercial
Siddhartha Bank Limited (SBL) registered under Company operation as a Securities Businessperson (Merchant Banker)
Act, 2063, which holds 51 percent of the paid-up capital from SEBON on Jestha 28, 2072. The major activities of the
and balance paid-up capital is held by various individuals company are issue management, portfolio management
and organizations. The company received license of Fund services, underwriting of securities, securities trustee,
Manager and Mutual Fund Depository from SEBON on registrar to shares, corporate advisory, fund management &
Bhadra 24, 2069. With this SCL became the first Mutual Fund depository services in a mutual fund, depository participant
Management Company of Nepal as per the Mutual Fund services in a central depository service etc.
Regulations. The company has successfully launched and is
managing three mutual fund schemes namely Siddhartha 2. BASIS OF PREPARATION
Equity Fund (SEF), Siddhartha Investment Growth Scheme The Financial statements of the company have been
2 (SIGS2), Siddhartha Investment Growth Scheme 3 (SIGS3) prepared on accrual basis of accounting in accordance
and Siddhartha Systematic Investment Scheme (SSIS). The with Nepal Financial Reporting Standards (NFRS) as published
company has received DP Registration Certificate from by the Accounting Standards Board (ASB) Nepal and
SEBON to operate as Depository Participants dated Baisakh pronounced by The Institute of Chartered Accountants of
09, 2070 and membership license from the CDS and Clearing Nepal (ICAN).
Ltd, dated Jestha 09, 2070 as per the CDS Byelaws, 2058.
MOU has been signed with SBL to use all of its branches as The significant accounting policies applied in the
representative to provide DP services nationwide. preparation of these financial statements are set out below.
These policies have been consistently applied to all the years
The company has received Merchant Banker License dated presented, unless otherwise stated.
Jestha 28, 2072. Under the license, the company is permitted
to provide Issue Management and Underwriting Services, The principal accounting policies are adopted in preparation
Registrar to Shares, Portfolio Management Services and of financial statements, which have been consistently
Corporate Advisory Services. applied unless otherwise stated.

The company was registered at Company Registrar Office 2.1. STATEMENT OF COMPLIANCE
on Falgun 02, 2068 with registration number of 1326/068/069 The Financial Statement of the entity which comprises
and registered office at Ward no: 01, Naxal, Kathmandu. It is components mentioned above have been prepared in
also registered with Inland Revenue Office on 2068/12/12 with accordance with Nepal Financial Reporting Standards
PAN registration number of 600380326. comprising of Nepal Financial Reporting Standards and
The registered address of Siddhartha Capital Limited is Nepal Accounting Standards, laid down by the Institute of
Narayanchaur Naxal, Kathmandu. Chartered Accountants of Nepal and in compliance with the
requirements of the Securities Act, 2063 and its regulations
1.2. FINANCIAL STATEMENTS and in conformity with the Companies Act 2063 and other
The Financial Statements for the year ended 15 July, relevant laws.
2024 (Ashadh 31, 2081) comprises Statement of Financial
Position, Statement of Profit or Loss, Statement of Other
Comprehensive Income, Statement of Changes in Equity,
Statement of Cash Flows and Notes to the Financial
Statements.

ANNUAL 337
REPORT 2023-24
 2.2 .REPORTING PERIOD AND APPROVAL OF FINANCIAL STATEMENTS

2.2.2. REPORTING PERIOD

The company follows the Nepalese financial year based on the Nepalese calendar. The corresponding dates for the English
calendar are as follows:

RELEVANT FINANCIAL STATEMENT NEPALESE CALENDAR DATE/PERIOD ENGLISH CALENDAR DATE/PERIOD

Statement of Financial Position 31st Ashadh,2081 15th July, 2024

Statement of Profit or Loss 1st Shrawan, 2080 to 31st Ashadh, 2081 17th July, 2023 to 15th July 2024
Statement of Other Comprehensive
1st Shrawan, 2080 to 31st Ashadh, 2081 17th July, 2023 to 15th July 2024
Income
Statement of Cash flows 31st Ashadh,2081 15th July, 2024

Statement of changes in Equity 1st Shrawan, 2080 to 31st Ashadh, 2081 17th July, 2023 to 15th July 2024

2.2.2. RESPONSIBILITY FOR FINANCIAL STATEMENTS

The Board of Directors is responsible for the preparation and The statement of profit or loss has been prepared using
presentation of Financial Statements of Siddhartha Capital classification ‘by nature’ method. The cash flows from
Limited as per the provisions of the Companies Act, 2063. operation within the statement of cash flows have been
derived using the direct method.
2.2.3. APPROVAL OF FINANCIAL STATEMENTS BY DIRECTORS
The accompanied Financial Statements have been The accounting policies have been consistently applied by
authorized by the Board of Directors vide its resolution dated the entity in preparation of financial statements with those of
9th September 2024 (24th Bhadra 2081) and recommended previous financial year, unless otherwise stated.
for its approval by the Annual General Meeting of the
shareholders. 2.7 MATERIALITY & AGGREGATION
In compliance with Nepal Accounting Standard - NAS 01
2.3. BASIS OF MEASUREMENT Presentation of Financial Statements, each material class
Financial statements of the company are prepared of similar items is presented separately in the Financial
under accrual basis of accounting and in accordance Statements. Items of dissimilar nature or functions too are
with requirements of Company Act, 2063. The Financial presented separately unless they are immaterial.
Statements are in conformity with NFRS principles; which
requires use of certain critical accounting estimates. The Financial Assets and Financial Liabilities are offset and the
Financial Statements are presented in NPR, rounded to the net amount reported in the Statement of Financial Position
nearest Rupee. only when there is a legally enforceable right to offset the
recognized amounts and there is an intention to settle on
a net basis, or to realize the assets and settle the liability
2.4. REPORTING PRONOUNCEMENTS
simultaneously. Income and expenses are not offset in the
The company has, for the preparation of financial
Statement of Profit or Loss unless required or permitted by an
statements, adopted the Nepal Financial Reporting
Accounting Standard.
Standards (NFRS) pronounced by ASB as effective on
September 13, 2013. NFRS conform, in all material respect, to
International Financial Reporting Standards (IFRS) as issued 2.8 FUNCTIONAL & PRESENTATION CURRENCY
by the International Accounting Standards Board (IASB). The Financial Statements of Entity are presented in Nepalese
Rupees (NPR), which is the currency of the primary economic
environment in which the Entity operates. Financial
2.5. NEW REPORTING STANDARDS IN ISSUE BUT NOT YET EFFECTIVE
information is presented in Nepalese Rupees. There was
A number of new standards and amendments to the existing
no change in Entity’s presentation and functional currency
standards and interpretations have been issued by IASB after
during the year under review.
the pronouncements of NFRS with varying effective dates.
Those become applicable when ASB Nepal incorporates
them within NFRS. 3.SIGNIFICANT ESTIMATES, JUDGMENTS AND ASSUMPTIONS
The preparation of Financial Statements in conformity
with Nepal Financial Reporting Standards (NFRS) requires
2.6. PRESENTATION OF FINANCIAL STATEMENTS
the management to make judgments, estimates and
The assets and liabilities of entity presented in the Statement
assumptions that affect the application of accounting
of Financial Position are grouped in an order of liquidity. An
policies and the reported amounts of assets, liabilities,
analysis on recovery or settlement within 12 months after the
income and expenses. Actual results may differ from these
reporting date (current) and more than 12 months after the
estimates.
reporting date (non-current) is presented in the Note.

ANNUAL
338 REPORT 2023-24
Estimates and underlying assumptions are reviewed on Interest income and expense on all trading assets and
an ongoing basis. Revisions to accounting estimates are liabilities are considered to be incidental to the Entity’s
recognized in the period in which the estimate is revised and trading operations and are presented together with all other
in any future periods affected. Disclosures of the accounting changes in the fair value of trading assets and liabilities in
estimates have been included in the relevant section of the net trading income.
notes wherever the estimates have been applied along with
the nature and effect of changes of accounting estimates, 4.1.3 GAIN/(LOSS) ON DISPOSAL AND FAIR VALUATION OF INVESTMENT
if any. SECURITIES
Gain on Sale of Investment Securities comprises realized
Further information about key assumptions concerning the trading gains on disposal of quoted shares, are presented
future, and other key sources of estimation uncertainty and in direct income as sale of financial assets at Fair Value
judgment, are set out in the relevant disclosure notes for the through Profit or Loss (FVTPL).
following areas:
Fair Valuation changes on Investment Securities comprises
 Fair valuation of investment Securities unrealized gains on fair valuation (marked to market
valuation) of quoted shares and investment in unit trust,
 Useful life of property, plant and equipment
are presented in profit or loss as gain on fair valuation of
financial assets at Fair Value through Profit or Loss (FVTPL).
4. SIGNIFICANT ACCOUNTING POLICIES

4.1.4. DIVIDEND INCOME

4.1. REVENUE RECOGNITION
Dividend income is recognized in profit or loss on an accrual
Revenue is recognized to the extent that it is probable that
basis when the Entity’s right to receive the dividend is
the future economic benefit will flow to the Company and
established.
the associated costs incurred or to be incurred can be
reliably measured.
Dividends are presented in net trading income or net gain/
(loss) from financial investments based on the underlying
Revenue is measured at the fair value of the consideration
classification of the equity investment.
received or receivable, net of sales returns, trade discounts
and revenue related taxes. However, in case of revenue
recognition for DMAT and Mero share income, cash basis of 4.2. INCOME TAX
accounting is followed i.e., cash received in our bank account Income tax expense comprises current and deferred tax.
for renewal of DMAT and Mero share account by the account It is recognized in profit or loss except to the extent that it
holder is booked as income. relates to items recognized directly in equity or in Other
Comprehensive Income (OCI).

4.1.1. FEES AND MANAGEMENT INCOME AND EXPENSES

Current tax assets and liabilities and deferred tax assets
Issue management fees, and Registrar to Shares (RTS) Fee
and liabilities are offset only to the extent that they relate to
are recognized as income on an accrual basis when the
income taxes imposed by the same taxation authority, there
related services are performed. Underwriting Commission,
is a legal right and intentions to settle on a net basis and it is
income on Cross Sale Services is recognized as the
allowed under the tax law of the relevant jurisdiction.
related services are performed. Commission expenses are
recognized on an accrual basis.
4.2.1. CURRENT TAX
Current tax is the expected tax payable on the taxable
4.1.2. INTEREST INCOME AND EXPENSES
income for the year, using tax rates enacted or substantively
Interest income and expense are recognized in profit or loss
enacted on the reporting date, and any adjustment to tax
using the effective interest method. The ‘effective interest
payable in respect of previous years.
rate’ is the rate that exactly discounts the estimated future
cash payments and receipts through the expected life of the
Provision for taxation is based on the profit for the year
financial asset or financial liability (or, where appropriate, a
adjusted for taxation purposes in accordance with the
shorter period) to the carrying amount of the financial asset
provisions of the Income Tax Act, 2002 and the amendments
or financial liability. When calculating the effective interest
thereto. Income Tax is calculated at the rate of 30% on
rate, the entity estimates future cash flows considering all
taxable profit for the FY 2080/81.
contractual terms of the financial instrument, but not future
credit losses.
4.2.2. DEFERRED TAX
The calculation of the effective interest rate includes Deferred taxation is computed for temporary differences
transaction costs and fees and points paid or received that between the carrying amounts of assets and liabilities for
are an integral part of the effective interest rate. Transaction financial reporting purposes and the tax base of assets and
costs include incremental costs that are directly attributable liabilities, which is the amount attributed to those assets
to the acquisition or issue of a financial asset or financial and liabilities for tax purposes. The amount of deferred tax
liability. provided is based on the expected manner of realization or
settlement of the carrying amount of assets and liabilities,
using tax rates enacted or substantively enacted on the
reporting date.

ANNUAL 339
REPORT 2023-24
 Deferred tax assets are recognized for unused tax losses, Recognition and Measurement, the company’s assets and
unused tax credits and deductible temporary differences to liabilities are classified/measured. Investment in equity
the extent that it is probable that future taxable profits will securities and mutual funds are classified as fair value
be available against which they can be used. Deferred tax through profit and loss. Debentures and Fixed Deposits are
assets are reviewed at each reporting date and are reduced classified as assets measured at amortized cost.
to the extent that it is no longer probable that the related tax
benefit will be realized. A. CLASSIFICATION

Deferred tax is measured at the tax rates that are expected

I. FINANCIAL ASSETS MEASURED AT AMORTIZED COST
to be applied to temporary differences when they reverse,
The Financial assets shall be measured at amortized cost if
using tax rates enacted or substantively enacted at the
both of the following conditions are meet:
reporting date.

a. The financial asset is held within a business model whose

Deferred tax assets and liabilities are offset if there is a
objective is to hold financial assets in order to collect
legally enforceable right to offset current tax liabilities and
contractual cash flow and
assets, and they relate to taxes levied by the same tax
authority on the same taxable entity, or on different tax
b. The contractual item of the financial asset give raise on
entities, but they intend to settle current tax liabilities and
specified dates to cash flows that are solely payment of
assets on a net basis or their tax assets and liabilities will be
principles and interest on the principle amount outstanding.
realized simultaneously.
Deferred tax has been calculated at the rate of 30%.
After the initial measurement, held to maturity financial
investments are subsequently measured at amortized
4.3. FOREIGN CURRENCY TRANSACTIONS cost using the effective interest rate, less impairment.
Transactions in foreign currencies are translated into the The amortization is included in ‘realized interest income’
respective functional currency of Entity at the spot exchange in the Statement of Profit or Loss. The losses arising from
rates at the date of the transactions. impairment of such investments are recognized in the
Statement of Profit or Loss.
Monetary assets and liabilities denominated in foreign
currencies at the reporting date are translated into the
II. FINANCIAL INSTRUMENTS CLASSIFIED AT FAIR VALUE THROUGH
functional currency at the spot exchange rate (Closing rate)
PROFIT OR LOSS
at that date. The foreign currency gain or loss on monetary
Financial assets, held for trading are recorded in the
items is the difference between the amortized cost in the
statement of financial position at fair value. Changes in fair
functional currency at the beginning of the year, adjusted
value are recognized through profit or loss. This classification
for effective interest and payments during the year, and the
includes quoted equity securities held for trading. The
amortized cost in the foreign currency translated at the spot
dividend income from the quoted equity securities is
exchange rate at the end of the year.
recorded in the profit or loss.

Non-monetary assets and liabilities that are measured at fair

III. FINANCIAL ASSETS HELD AT FAIR VALUE THROUGH OCI
value in a foreign currency are translated into the functional
In rare circumstances, financial assets whose objective
currency at the spot exchange rate at the date on which
or business model is not to collect Contractual Cash flow
the fair value is determined. Non-monetary items that are
is classified at fair value through OCI. Investment in equity
measured based on historical cost in a foreign currency are
which are not regularly traded are classified at fair value
translated using the spot exchange rate at the date of the
through OCI. The gain/loss on movement in fair value is
transaction.
charged to OCI. Its tax impact is also charged into OCI. The
difference between the fair value realized and the carrying
Foreign currency differences arising on translation are
amount at the year of disposal is charged to Profit or loss.
generally recognized in profit or loss.

4.4. FINANCIAL INSTRUMENTS – INITIAL RECOGNITION, B.RECOGNITION / DE- RECOGNITION

CLASSIFICATION AND SUBSEQUENT MEASUREMENT All financial assets and liabilities are initially recognized on
The principal financial assets of the company comprise the trade date, i.e. the date on which the company becomes
of Investment securities measured at amortized cost, a party to the contractual provisions of the instrument.
Investment in securities measured at fair value through profit This includes ‘regular way trade’. Regular way trade means
or loss (FVTPL), investment in securities measured at fair purchases or sales of financial assets that required delivery
value through other comprehensive income (FVTOCI), other of assets within the time frame generally established by
financial assets, other assets and cash and cash equivalents. regulations or convention in the market place.
The main purpose of these financial instruments is to
generate a return on the investment made by the company. Investments are derecognized when the rights to receive
The company’s principal financial liabilities comprise of due cash flows from the investments have expired or the
to public, other liabilities and other financial liabilities. company has substantially transferred all risks and rewards
of ownership.
In accordance with NFRS-9; Financial Instruments:
A financial liability is derecognized when the obligation under
the liability is discharged or cancelled or expired.

ANNUAL
340 REPORT 2023-24
Realized gains and realized losses on de-recognition are iii. Financial Assets measured at fair value through OCI
determined using the weighted average method and are After initial measurement, financial assets are subsequently
included in the profit or loss in the period in which they arise. measured at fair value. Unrealized gains and losses are
The realized gain is the difference between an instrument’s recognized directly in equity through ‘Other comprehensive
weighted average cost and disposal amount. income / expense’ in the ‘Fair value reserve’. When the
investment is disposed of the cumulative gain or loss is
Cost of purchase of instruments includes transaction cost recognized in and recycled through OCI. Where Bank holds
on such purchases, while disposal value is calculated net of more than one investment in the same security, they are
transaction cost involved on such disposal. deemed to be disposed off on a first-in-first-out basis.
Dividend earned whilst holding ‘Financial investments at fair
value through OCI’ are recognized in the Statement of Profit
C. MEASUREMENT
or Loss as ‘other operating income’ when the right to receive
i.Financial Assets measured at amortized cost
the payment has been established.
Assets are measured initially at fair value plus transaction
costs and subsequently amortized using the effective
The gain/loss on movement in fair value is charged to OCI. Its
interest rate method, less impairment losses if any. Such
tax impact is also charged into OCI. The difference between
assets are reviewed at the end of each reporting period
the fair value realized and the carrying amount at the year of
to determine whether there is objective evidence of
disposal is charged to Profit or loss.
impairment. If evidence of impairment exists, an impairment
loss is recognized in Statement of profit or loss as the
difference between the asset’s carrying amount and the A. OFFSETTING FINANCIAL INSTRUMENTS
present value of estimated future cash flows discounted at Financial assets and liabilities are offset and the net amount
the original effective interest rate. reported in the statement of financial position when there is
a legally enforceable right to offset the recognized amounts
If in a subsequent period the amount of an impairment loss and there is an intention to settle on a net basis, or realize the
recognized on a financial asset carried at amortized cost asset and settle the liability simultaneously.
decreases and the decrease can be linked objectively to
an event occurring after the write-down, the write-down is B. FAIR VALUE MEASUREMENT
reversed through profit or loss. ‘Fair value’ is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
ii. Financial assets and liabilities held at fair value through between market participants at the measurement date
profit or loss in the principal or, in its absence, the most advantageous
At initial recognition, the company measures a financial market to which the Entity has access at that date. The fair
asset at its fair value including transaction costs of those value of a liability reflects its non-performance risk.
financial assets.
When available, the Entity measures the fair value of an
Subsequent to initial recognition, all financial assets and instrument using the quoted price in an active market
financial liabilities at fair value through profit or loss are for that instrument. A market is regarded as active if
measured at fair value. Gains and losses arising from transactions for the asset or liability take place with sufficient
changes in the fair value of the ‘financial assets or financial frequency and volume to provide pricing information on an
liabilities at fair value through profit or loss category are ongoing basis.
presented in the statement of profit and loss within net
gains/(losses) on financial instruments held at fair value If there is no quoted price in an active market, then the Entity
through profit or loss in the period in which they arise. uses valuation techniques that maximize the use of relevant
observable inputs and minimize the use of unobservable
Fair value is the price that would be received to sell an inputs. The chosen valuation technique incorporates all of
asset or paid to transfer a liability in an orderly transaction the factors that market participants would take into account
between market participants at the measurement date. in pricing a transaction.
The fair value of financial assets and liabilities traded in
active markets is subsequently based on their quoted The best evidence of the fair value of a financial instrument
market prices at the end of the reporting period without any at initial recognition is normally the transaction price – i.e. the
deduction for estimated future selling costs. The quoted fair value of the consideration given or received. If the Entity
market price used for financial assets held by the SCL is the determines that the fair value at initial recognition differs
closing price. from the transaction price and the fair value is evidenced
neither by a quoted price in an active market for an identical
The fair value of financial assets and liabilities that are not asset or liability nor based on a valuation technique that
traded in an active market are determined using valuation uses only data from observable markets, then the financial
techniques. instrument is initially measured at fair value, adjusted
to defer the difference between the fair value at initial
recognition and the transaction price. Subsequently, that
Further details on how the fair values of financial instruments difference is recognized in Statement of profit or loss on an
are determined are disclosed in point “e” of this Schedule. appropriate basis over the life of the instrument but no later

ANNUAL 341
REPORT 2023-24
 than when the valuation is wholly supported by observable m. ank Deposit shall be valued considering all the accrued
market data or the transaction is closed out. interest for the period.

The detailed valuation process for listed securities is as n. Other market instruments/investments are valued at cost
follows: of acquisition.

a. Investments are accounted for on trade date and off- F . IDENTIFICATION AND MEASUREMENT OF IMPAIRMENT
market transactions including acquisitions through private At each reporting date, the Entity assesses whether there is
placement/ private treaty are accounted when scheme objective evidence that financial assets not carried at fair
obtains the enforceable obligation/right. value through profit or loss are impaired. A financial asset
or a group of financial assets is impaired when objective
b. Cost of investments includes brokerage, transaction evidence demonstrates that a loss event has occurred after
charges, and any other charge customarily included in the initial recognition of the asset(s) and that the loss event
the broker’s note. has an impact on the future cash flows of the asset(s) that
can be estimated reliably.
c. Equities which are traded frequently shall be valued at
closing market price.
Objective evidence that financial assets are impaired
includes:
d. In case trading has been suspended due merger and
acquisition shall be valued at last trading price as  significant financial difficulty of the borrower or issuer;
provided by NEPSE.
 default or delinquency by a borrower;
e. Equities which are not traded frequently i.e. which are
listed but not transacted for more than 30 days shall be  the restructuring of a loan or advance by the Entity on
valued at last trading price as provided by NEPSE. terms that the Entity would not consider otherwise;

 indications that a borrower or issuer will enter bankruptcy;

f. In case where 180 days closing average price of ordinary
shares is not found in NEPSE, then price shall be taken at  the disappearance of an active market for a security; or
cost of acquisition or last found 180 days closing average
price whichever is lower.  Observable data relating to a group of assets such as
adverse changes in the payment status of borrowers
g. n case of Promoter Shares, where 180 days closing or issuers in the group, or economic conditions that
average price is not found in NEPSE, then price shall correlate with defaults in the group.
be taken at 50% of the publicly traded share price for
promoter shares that are not traded publicly and in case In addition, for an investment in an equity security, a
of publicly traded promoter share, price shall be taken at significant or prolonged decline in its fair value below its cost
cost of acquisition or last found 180 days closing average is objective evidence of impairment. The Entity considers
price whichever is lower. evidence of impairment for loans and advances and held
to - maturity investment securities at both a specific asset
h. IPO investments are valued as advance for application and a collective level. All individually significant loans and
amount till allotment at exact amount applied for. receivables and held-to-maturity investment securities are
assessed for specific impairment.
i. After allotment till listing or till trading is not commenced,
IPO investment is valued using valuation model which Impairment losses on assets measured at amortized cost
is 50% of latest net worth published by the company are calculated as the difference between the carrying
and 50% based on the earning capitalization, based on amount and the present value of estimated future cash
the projections of the company by considering latest flows discounted at the asset’s original effective interest rate.
interest rate of the government bonds as discount factor.
However, IPO issued at premium and through book If the terms of a financial asset are renegotiated or modified
building shall be valued at issue price and awarded bid or an existing financial asset is replaced with a new one due
price respectively. to financial difficulties of the borrower, then an assessment is
made of whether the financial asset should be derecognized.
j. In case of right shares and auction shares, investments If the cash flows of the renegotiated asset are substantially
are valued as advance for application amount till different, then the contractual rights to cash flows from
allotment at exact amount applied for. Further, after the original financial asset are deemed to have expired.
allotment till listing, the valuation shall be done based on In this case, the original financial asset is derecognized
market price. and the new financial asset is recognized at fair value.
The impairment loss before an expected restructuring is
k. In case of bonus shares, valuation shall be done based on measured as follows:
market price after the book close date.
 If the expected restructuring will not result in
l. Bonds, Debentures and Treasury Bills shall be valued at derecognition of the existing asset, then the estimated
cost of acquisition. cash flows arising from the modified financial asset are

ANNUAL
342 REPORT 2023-24
 included in the measurement of 4.5. DUE TO PUBLIC
the existing asset based on their Amounts refundable to investors, RTS and custodial dividend payable, advance
expected timing and amounts received/ transfer from DP clients is categorized as amount due to public.
discounted at the original
effective interest rate of the 4.6 CASH AND CASH EQUIVALENTS
existing financial asset. Cash and cash equivalents include cash in hand, deposits held at call with
banks.
 If the expected restructuring will
result in derecognition of the 4.7. PROPERTY, PLANT AND EQUIPMENT
existing asset, then the expected Property, plant and equipment are tangible items that are held for use in the
fair value of the new asset is production or supply of goods or services or for administrative purposes and
treated as the final cash flow from are expected to be used during more than one period.
the existing financial asset at
the time of its derecognition. This
RECOGNITION AND MEASUREMENT
amount is discounted from the
Items of property, plant and equipment are measured at cost less
expected date of derecognition
accumulated depreciation and any accumulated impairment losses.
to the reporting date using the
original effective interest rate of
Purchased software that is integral to the functionality of the related equipment
the existing financial asset.
is capitalized as part of that equipment.
If significant parts of an item of property or equipment have different useful
Impairment losses are recognized
lives, then they are accounted for as separate items (major components) of
in profit or loss and reflected in an
property and equipment.
allowance account against loans
and receivables or held-to-maturity
Any gain or loss on disposal of an item of property and equipment (calculated
investment securities. If an event
as the difference between the net proceeds from disposal and the carrying
occurring after the impairment was
amount of the item) is recognized within other income in profit or loss.
recognized causes the amount of
The low value minor equipment’s below NPR 5,000 are not booked as Property,
impairment loss to decrease, then
Plant and Equipment to ease record keeping and is shown under Other
the decrease in impairment loss is
Office Expenses in Schedule 22 as the cumulative impact of such amount is
reversed through profit or loss.
considered immaterial.

Impairment losses on available-

for-sale investment securities are SUBSEQUENT COSTS
recognized by reclassifying the Subsequent expenditure is capitalized only when it is probable that the future
losses accumulated in the fair value economic benefits of the expenditure will flow to the Entity. Ongoing repairs and
reserve in equity to profit or loss. The maintenance are expensed as incurred.
cumulative loss that is reclassified
from equity to profit or loss is the DEPRECIATION
difference between the acquisition Depreciation is calculated to write off the cost of items of property and
cost, net of any principal repayment equipment less their estimated residual values using the straight-line method
and amortization, and the current over their estimated useful lives, and is generally recognized in profit or loss.
fair value, less any impairment loss Leased assets are depreciated over the shorter of the lease term and their
recognized previously in profit or loss. useful lives unless it is reasonably certain that the Entity will obtain ownership by
Changes in impairment attributable the end of the lease term. Land is not depreciated.
to application of the effective
interest method are reflected as a The estimated useful lives of significant items of property and equipment lives
component of interest income. for the current and comparative periods are as follows are as follows:

If, in a subsequent period, the fair

value of an impaired available-for- ASSET TYPE USEFUL LIFE TIME (YEARS)
sale debt security increases and the
increase can be related objectively Laptop and Computers 4
to an event occurring after the Battery 4
impairment loss was recognized,
Furniture & Fixtures 4
then the impairment loss is reversed
through profit or loss; otherwise, any Computer and Office Equipment 4
increase in fair value is recognized
Electrical and Acs 4
through OCI. Any subsequent
recovery in the fair value of an Motor Vehicles 5
impaired available-for-sale equity Lease Hold Assets To the extent of lease period (10 Years)
security is always recognized in OCI.
ROU Lease Asses Over the remaining contract period

ANNUAL 343
REPORT 2023-24
 DERECOGNITION only by future uncertain events
The carrying amount of an item of property, plant and equipment is derecognized or present obligations where the
on disposal or when no future economic benefits are expected from its use or transfer of economic benefit is
disposal. The gain or loss arising from derecognition of an item of property, plant not probable or cannot be reliably
and equipment is included in profit or loss when the item is derecognized. measured. Contingent liabilities are
not recognized in the Statement of
4.8. INTANGIBLE ASSETS Financial Position but are disclosed
unless they are remote.

SOFTWARE
Software acquired by the Company is measured at cost less accumulated 4.12. EMPLOYEE BENEFITS
amortization and any accumulated impairment losses.
SHORT-TERM EMPLOYEE BENEFIT
Subsequent expenditure on software assets is capitalized only when it increases Short-term employee benefits are
the future economic benefits embodied in the specific asset to which it relates. All those expected to be settled wholly
other expenditures are expensed as incurred. before twelve months after the
end of the annual reporting period
Software is amortized on a straight-line basis in profit or loss over its estimated during which employee services
useful life, from the date on which it is available for use. The estimated useful lives are rendered, but do not include
for the current and comparative periods are as follows: termination benefits. Salaries, leave
benefits, bonuses and non-monetary
benefits paid to current employees.
ASSET TYPE USEFUL LIFE TIME (YEARS)
5 years
Software The undiscounted amount of
the benefits expected to be paid
in respect of service rendered
Amortization methods, useful lives and residual values are reviewed at each
by employees in an accounting
reporting date and adjusted if appropriate.
period is recognized in that period.
The expected cost of short-term
4.9. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
compensated absences is recognized
Non-current assets (such as property) and disposal groups (including both the
as the employees render service
assets and liabilities of the disposal groups) are classified as held for sale and
that increases their entitlement or,
measured at the lower of their carrying amount and fair value less cost to sell
in the case of non-accumulating
when:
absences, when the absences occur,
and includes any additional amounts
i. their carrying amounts will be recovered principally through sale;
an entity expects to pay as a result of
unused entitlements at the end of the
ii. they are available-for-sale in their present condition; and
period.

iii. their sale is highly probable.

DEFINED CONTRIBUTION PLAN
Immediately before the initial classification as held for sale, the carrying amounts A defined contribution plan is a post-
of the assets (or assets and liabilities in a disposal group) are measured in employment plan under which an
accordance with the applicable accounting policies described above. entity pays fixed contributions into
a separate entity and will have no
There are no assets that meet the recognition criteria for assets held for sale and legal or constructive obligation to
discontinued operation. pay a further amount. Obligations for
contributions to defined contribution
plans are recognized as expense in
4.10. PROVISIONS
the Statement of profit or loss as and
A provision is recognized if, as a result of a past event, the Entity has a present
when they are due.
legal or constructive obligation that can be estimated reliably, and it is probable
that an outflow of economic benefits will be required to settle the obligation.
A. EMPLOYEE’S PROVIDENT FUND
4.11. COMMITMENTS & CONTINGENCIES The company and employee
All discernible risks are accounted for in determining the amount of all known contribute 10% each on the salary
liabilities. of each employee to an approved
Provident Fund.
Contingent liabilities are possible obligations whose existence will be confirmed

ANNUAL
344 REPORT 2023-24
B. GRATUITY Cash and cash equivalents comprise short term, highly liquid investments that are
The company contributes 8.33% readily convertible to known amounts of cash and are subject to an insignificant
per month for every employee. This risk of changes in value.
amount is deposited at individual
employee account maintained at
4.14. SUBSEQUENT EVENTS
CIT.
Events after the reporting period are those events, favorable and unfavorable,
that occur between the reporting date and the date the Financial Statements are
C. DEFINED BENEFIT PLAN authorized for issue.
A defined benefit plan is a post-
employment benefit plan other than All material and important events that occurred after the reporting date have been
a defined contribution plan. considered and appropriate disclosures if any are made in Note to the Financial
Statements.
C. ANNUAL LEAVE ENCASHMENT
The company’s liability towards There are no material events that have occurred subsequent to 31 Ashad 2081 (15
the accumulated leave which is July 2024) till the signing of this financial statement.
expected to be utilized beyond one
year from the end of the reporting 4.15. SEGMENTAL REPORTING
period is treated as other long-term The company is organized for management and reporting purposes into major
employee benefits. The company’s three segments namely Fund Management, Merchant Banking and Others. The
net obligation towards unutilized segmental information is disclosed in notes.
accumulated leave is calculated
by discounting the amount of 4.16.COMPARATIVE INFORMATION
future benefit that employees have The comparative information is re-classified wherever necessary to conform
earned in return for their service with the current year’s classification in order to provide a better presentation. The
in the current and prior periods details of such re-classifications have been provided in Notes to the financial
to determine the present value of statements.
such benefits. The calculation is
performed by a qualified actuary
4.17. LEASEHOLD ASSETS
using the projected unit credit
Lease accounting has been prepared according to IFRS 16. The leased assets
method.
are capitalized and included in ‘Property, plant and equipment’ under heading
“Right to use (ROU) Lease Assets” and the corresponding liability is included in
4.13. STATEMENT OF CASH FLOWS
‘Other liabilities’ under heading “Finance Lease Obligation”. A finance lease and its
The Statement of Cash Flow has
corresponding liability are recognized for the minimum guaranteed payment, as
been prepared using the “Direct
set out in the lease agreements.
Method” of preparing Cash Flows
in accordance with the Nepal
Accounting Standard - (NAS 7) Finance charges payable are recognized in ‘Interest expenses’ over the period of
“Statement of Cash Flows”. the lease based on the interest rate implicit in the lease so as to give a constant
rate of interest on the remaining balance of the liability. ROU lease assets and
liabilities was calculated by discounting the annual lease payment by discounting
rate of 10% as per management decision.

ANNUAL 345
REPORT 2023-24
 SIDDHARTHA CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 Ashadh 2081 (15 July 2024)
Schedule 24
PAID UP SHARE CAPITAL STRUCTURE

SHARE OWNERSHIP DETAIL PERCENTAGE (%) SHARE CAPITAL (NPR)

Domestic ownership 100 200,000,000

1.1 Siddhartha Bank Limited 51 102,000,000

1.2 Other Promoters 49 98,000,000

Foreign Ownership - -

Total 100 200,000,000

15 JULY 2024 16 JULY 2023

PARTICULARS PER UNIT VALUE
NUMBER AMOUNT (NPR) AMOUNT (NPR)
(NPR)
Authorized Capital 2,000,000 100 200,000,000 200,000,000

Issued Capital 2,000,000 100 200,000,000 200,000,000

Subscribed Capital 2,000,000 100 200,000,000 200,000,000

PAID UP SHARES (NUMBER) 15 JULY 2024 16 JULY 2023

Fully Paid Ordinary Shares at the beginning of the Year 2,000,000 2,000,000

Number of Shares subscribed 2,000,000 2,000,000

Fully Paid Ordinary Shares at the end of the Year (No.) 2,000,000 2,000,000

Per unit Value of the Shares 100 100

Ordinary Shares (Amount NPR) 200,000,000 200,000,000

Fully Paid Ordinary Shares (Amount NPR) 200,000,000 200,000,000

2. GENERAL RESERVE
General reserve has been created at the rate 10% on the profit of current financial year amounting to NPR 6,647,741 as required
by Securities Business (Merchant Banking) Regulations 2064 (with amendment). Total accumulated balance of general reserve
as on 15 July 2024 is NPR 72,493,877. No Dividend (either cash dividend or bonus share) are distributed from the amount in
General/Statutory Reserve.

3. CORPORATE SOCIAL RESPONSIBILITY (CSR) RESERVE:

The fund created for the purpose of corporate social responsibility by allocating 1% of Net profit of current financial year
amounting to NPR 664,774 as required by Securities Business (Merchant Banking) Regulations 2064 (with amendment) is
presented under this head. The accumulated balance of CSR Reserve as on 15 July 2024 is NPR 2,507,687. Amount spent on CSR
activity is charged to this reserve.

4. FAIR VALUE RESERVE

Any increase or decrease in fair value of investments measured at FVTOCI is charged under this head. The accumulated
balance of Fair Value Reserve as on 15 July 2024 is NPR. (2,312,060).

5. DEFINED EMPLOYEE BENEFIT OBLIGATION

In order to fully provide for the liabilities against staff accumulated leave encashment, the company has created defined
benefit obligation of NPR 4,457,470 up to 15th July, 2024 based on actuarial valuation of FY 2023-24. The detail of actuary for
valuation of leave is as follow:

Valuating Company Pivot Risk Pvt. Ltd.

Name of Actuary Mr. Teja Ranade Gadhoke

Period Covered 17 July 2023 to 15 July 2024

Actuary Valuation Report Issue Date 24 August 2024

The details of actuary valuation on leave have been presented as follows:

ANNUAL
346 REPORT 2023-24
5.2. AMOUNT RECOGNIZED IN STATEMENT OF PROFIT OR LOSS

PARTICULARS CURRENT YEAR PREVIOUS YEAR

Current Service Cost 816,395 858,140
Interest Cost 293,635 263,135
Expected Return on Plan Assets - -
Past Service Cost - -
Net Actuarial Losses/(Gains) 97,176 (395,629)
(Gain) / Loss due to Settlements / Curtailments / Acquisitions / Divestitures - -
Total Expense/(Income) included in “Employee Benefit Expense” 1,207,206 725,646

5.3. AMOUNT RECOGNIZED IN STATEMENT OF OTHER COMPREHENSIVE INCOME

PARTICULARS CURRENT YEAR PREVIOUS YEAR
Actuarial (Gains) / Losses on DBO - -
Actuarial Gains / (Losses) on Plan Assets - -
Net Actuarial (Gains) / Losses recognized in OCI during the year. - -
Cumulative Actuarial (Gains) / Losses recognized in OCI - -

5.3. DETAILS OF AMOUNT PRESENTED IN STATEMENT OF FINANCIAL POSITION

PARTICULARS CURRENT YEAR PREVIOUS YEAR

Defined Benefit Obligation (DBO) at the end of period 4,457,470 3,274,963

Fair Value of Plan Assets at the end of period - -

Funded Status - (Surplus)/Deficit 4,457,470 3,274,963

Unrecognized Past Service Cost / (Credit) - -

Unrecognized Asset due to Limit in Para 58(b) - -

Liability/(Asset) recognized in the Statement of Financial Position 4,457,470 3,274,963

5.4. CHANGE IN PRESENT VALUE OF BENEFIT OBLIGATION DURING THE PERIOD

PARTICULARS CURRENT YEAR PREVIOUS YEAR

Defined Benefit Obligation at the beginning of period 3,274,963 3,298,124

Current Service Cost 816,395 858,140

Interest Cost 293,635 263,135

Actual Plan Participants’ Contributions - -

Actuarial (Gains)/Losses 97,176 (395,629)

Acquisition/Business Combination / Divestiture - -

Actual Benefits Paid (24,699) (748,807)

Past Service Cost - -

Changes in Foreign Currency Exchange Rates - -

Loss / (Gains) on Curtailments - -

Liabilities Extinguished on Settlements - -

Defined Benefit Obligation at the end of period 4,457,470 3,274,963

ANNUAL 347
REPORT 2023-24
 5.5.ACTUARIAL ASSUMPTIONS

5.1.1. FINANCIAL ASSUMPTIONS

PARTICULARS CURRENT YEAR PREVIOUS YEAR

Discount Rate 9.00% 9.00%

Salary Escalation Rate 10.00% 10.00%

Expected Return on Plan Assets Not Applicable Not Applicable

5.1.2. DEMOGRAPHIC ASSUMPTIONS

PARTICULARS CURRENT YEAR PREVIOUS YEAR
Nepal Mortality Table for Assured Lives Nepal Mortality Table for Assured
Mortality Table
(2009) Lives (2009)
Withdrawal Rate 10.00% 10.00%

Retirement Age 58 Years 58 Years

5.1.2.OTHER DISCLOSURES

PARTICULARS CURRENT YEAR PREVIOUS YEAR

Expected Contributions for the next financial year* - -

Weighted average duration (based on discounted cash flows) 7.79 15.71

*The plan is unfunded as on the valuation date.

6. CLASSIFICATION OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

Financial instruments are measured on an ongoing basis either at fair value or at amortized cost. The summary of significant
accounting policies describes how the classes of financial instruments are measured, and how income and expenses,
including fair value gains and losses, are recognized. The following table shows the analysis of the carrying amounts of the
financial assets and liabilities by category as defined in NFRS 9:

CURRENT YEAR
PARTICULARS FAIR VALUE THROUGH PL AMORTIZED COSTS FAIR VALUE THROUGH OCI TOTAL
Financial Assets
Cash and Bank - 358,427,726 - 358,427,726
Investment Securities 178,571,731 83,976,000 106,750,558 369,298,289
Other Financial Assets - 51,693,100 - 51,693,100
Total 178,571,731 494,096,826 106,750,558 779,419,115
FINANCIAL LIABILITIES
Due to Public - 288,200,049 - 288,200,049
Other Financial Liabilities - 39,492,727 - 39,492,727
Total - 327,692,776 - 327,692,776

PREVIOUS YEAR
PARTICULARS FAIR VALUE THROUGH PL AMORTIZED COSTS FAIR VALUE THROUGH OCI TOTAL
Financial Assets
Cash and Bank - 364,901,874 - 364,901,874
Investment Securities 109,407,897 136,476,000 111,915,159 357,799,055
Other Financial Assets - 29,952,721 - 29,952,721
Total 109,407,897 531,330,595 111,915,159 752,653,650
FINANCIAL LIABILITIES
Due to Public - 280,799,616 - 280,799,616
Other Financial Liabilities - 37,335,800 - 37,335,800
Total - 318,135,416 - 318,135,416

ANNUAL
348 REPORT 2023-24
7. INVESTMENT SECURITIES

Investment securities has been classified as follows:

PARTICULARS CURRENT YEAR PREVIOUS YEAR

Investment Securities measured at Amortized Cost 83,976,000 136,476,000

Investment in Securities measured at FVTPL 178,571,731 109,407,897

Investments in Securities measured at FVTOCI 106,750,558 111,915,159

Total 369,298,289 357,799,055

7.1 INVESTMENT SECURITIES MEASURED AT AMORTIZED COST:

These assets represent the investments made in Fixed Deposit and Debentures which as follows: The details of Investment in
Fixed deposit and debenture are as follows:

INVESTMENT MADE IN FIXED DEPOSIT

PARTICULARS CURRENT YEAR PREVIOUS YEAR

Citizen Bank International Limited - 30,000,000

Muktinath Bikash Bank Limited - 5,000,000

NMB Bank Limited - 5,000,000

Progressive Finance Limited - 20,000,000

Shree Investment and Finance Companies - 5,000,000

Kamana Sewa Bikas Bank Limited 5,000,000 5,000,000

Jyoti Bikash Bank Limited 5,000,000 20,000,000

Mahalaxmi Bikash Bank Limited 10,000,000 20,000,000

Siddhartha Bank Limited 8,000,000 3,500,000

Shangri-la Development Bank Limited 5,000,000 15,000,000

Manjushree Finance Limited 18,000,000 -

NIC Asia Bank Limited 5,000,000 -

Shine Resunga Development Bank Limited 20,000,000 -

Sub Total Amount 76,000,000 128,500,000

INVESTMENT MADE IN DEBENTURES:

8.75% Muktinath Debenture 2084/85 1,000,000 1,000,000

10.25 % Citizen Bank International Ltd debenture 476,000 476,000

10.25% Kumari Bank Ltd Debenture 5,000,000 5,000,000

10.25% Nepal SBI debenture 2083 1,500,000 1,500,000

Sub Total 7,976,000 7,976,000

Total 83,976,000 136,476,000

ANNUAL 349
REPORT 2023-24
 7.2. INVESTMENT IN SECURITIES MEASURED AT FVTPL

7.1.2 INVESTMENT IN EQUITY MEASURED AT FVTPL

The details of Investment in Equity measured at fair value through profit or loss is as follows:

STOCK FY 2023-24 FY 2022-23

SYMBOL UNITS COST FAIR VALUE UNITS COST FAIR VALUE

GBIME - - - 1 - 186

LBBL - - - 5,000 1,954,079 2,065,000

RHPL - - - 7,000 2,304,515 2,100,000

RMDC - - - 3,000 2,838,820 2,325,000

SHINE - - - 5,000 1,848,136 1,920,000

SJCL - - - 7,000 2,303,120 2,078,300

SPDL - - - 10,000 3,296,217 2,501,000

ALICL 9,698 6,802,156 6,041,854 6,000 4,645,950 4,470,600

CBBL 7,361 7,010,000 6,624,900 7,010 7,891,027 7,010,000

HLI 784 397,488 306,544 784 638,494 397,488

NABIL 1,353 810,718 708,972 1,353 1,179,146 810,718

NLICL 3,842 2,436,249 2,285,990 2,842 1,786,077 1,833,090

NUBL 8,215 6,284,475 5,848,259 8,215 8,794,301 6,284,475

SALICO 4,178 3,125,144 3,037,406 4,178 3,140,058 3,125,144

SJLIC 9,923 5,405,403 4,265,898 5,000 3,440,561 3,050,000

CHDC 2,500 2,596,139 2,897,500 - - -

CKHL 1,700 1,001,289 1,031,390 - - -

CLI 5,000 2,427,928 2,723,000 - - -

ILI 1,875 868,417 849,375 - - -

KSBBL 14,322 5,286,931 5,957,952 - - -

MBL 5,665 1,393,203 1,133,000 - - -

MKCL 2,300 2,758,585 3,197,000 - - -

NRN 4,500 3,297,024 3,366,000 - - -

PRIN 5,418 4,229,067 4,475,268 - - -

RNLI 2,320 1,095,334 1,062,560 - - -

RSM 6,572 5,993,664 5,993,664 - - -

SARBTM 5,000 4,249,757 4,032,500 - - -

SLBBL 465 364,519 395,715 - - -

SNLI 6,524 3,149,079 3,335,721 - - -

SONA 3,500 1,627,272 1,596,350 - - -

TVCL 4,475 2,488,126 2,224,075 - - -

UMRH 12,000 5,254,539 5,160,000 - - -

UPCL 14,000 3,360,378 2,885,400 - - -

Total 83,712,884 81,436,292 46,060,501 39,971,001

The company has acquired the shares of Reliance Spinning Mill through bidding process as on 01/02/2024. The share has been
valued at the bid price as per the valuation policy of the company.

ANNUAL
350 REPORT 2023-24
7.2.2. INVESTMENTS IN MUTUAL FUNDS MEASURED AT FVTPL
The details of Investment in Mutual Funds measured at fair value through profit or loss is as follows:

FY 2023-24 FY 2022-23
NAME OF THE MUTUAL FUND
NO. OF UNITS COST FAIR VALUE NO. OF UNITS COST FAIR VALUE

Sanima Equity Fund 100,000 1,180,000 1,091,000 100,000 1,275,000 1,180,000

Sanima Large Cap Fund 50,000 446,000 464,500 50,000 466,000 446,000
Siddhartha Investment Growth
4,335,970 39,153,809 41,148,355 4,335,970 42,449,146 39,153,809
Scheme - 2
Sunrise First Mutual Fund 201,000 2,227,080 2,080,350 201,000 2,311,500 2,227,080

NMB50 297,334 3,122,007 2,985,234 297,334 3,835,609 3,122,007

RBB Mutual Fund 1 100,000 808,000 816,000 100,000 927,000 808,000

Siddhartha Systematic
5,000,000 44,975,010 48,550,000 2,500,000 20,750,005 22,500,000
Investment Scheme

Total 97,135,439 69,436,896

Investment in Unquoted Mutual Fund includes investment in open-ended mutual funds.

7.3. INVESTMENT SECURITIES MEASURED AT FVTOCI:

The details of Investment in Securities measured at fair value through Other Comprehensive Income are as follows:

FY 2023-24 FY 2022-23
NAME OF THE MUTUAL FUND
NO. OF UNITS COST FAIR VALUE NO. OF UNITS COST FAIR VALUE

Avasar Equity Diversified Fund 50,000 50,000,000 50,000,000 50,000 50,000,000 50,000,000

Siddhartha Investment
6,005,350 61,915,159 56,750,558 6,005,350 60,053,500 61,915,159
Growth Scheme - 3

Total 111,915,159 106,750,558 110,053,500 111,915,159

The investment in Avasar Equity Diversified Fund has been valued at cost of acquisition which are in line with the valuation
policy of the Capital and its parent company i.e. Siddhartha Bank Ltd.

ANNUAL 351
REPORT 2023-24
 7.4. NET GAIN/(LOSS) ON FINANCIAL INVESTMENTS MEASURED AT FVTPL
The details of unrealized gain/(loss) on financial investment measured at FVTPL for the FY 2023-24 is given as follows:

FY 2023-24 FY 2022-23
SYMBOL UNREALIZED UNREALIZED
COST FAIR VALUE COST FAIR VALUE
GAIN/(LOSS) GAIN/(LOSS)
GBIME - - - 251 186 (65)

LBBL - - - 1,954,079 2,065,000 110,921

RHPL - - - 2,304,515 2,100,000 (204,515)

RMDC - - - 1,995,238 2,325,000 329,762

SHINE - - - 1,848,136 1,920,000 71,864

SJCL - - - 2,303,120 2,078,300 (224,820)

SPDL - - - 3,296,217 2,501,000 (795,217)

ALICL 6,802,156 6,041,854 (760,302) 4,343,242 4,470,600 127,358

CBBL 7,010,000 6,624,900 (385,100) 6,320,873 7,010,000 689,127

HLI 397,488 306,544 (90,944) 394,886 397,488 2,602

NABIL 810,718 708,972 (101,746) 1,059,637 810,718 (248,919)

NLICL 2,436,249 2,285,990 (150,259) 1,320,404 1,833,090 512,686

NMB50 3,122,007 2,985,234 (136,773) 3,835,609 3,122,007 (713,602)

NUBL 6,284,475 5,848,259 (436,216) 7,586,190 6,284,475 (1,301,715)

RMF1 808,000 816,000 8,000 927,000 808,000 (119,000)

SAEF 1,180,000 1,091,000 (89,000) 1,275,000 1,180,000 (95,000)

SALICO 3,125,144 3,037,406 (87,738) 3,140,058 3,125,144 (14,914)

SFMF 2,227,080 2,080,350 (146,730) 2,311,500 2,227,080 (84,420)

SIGS2 39,153,809 41,148,355 1,994,546 42,449,146 39,153,809 (3,295,337)

SJLIC 5,405,403 4,265,898 (1,139,505) 2,519,069 3,050,000 530,931

SLCF 446,000 464,500 18,500 466,000 446,000 (20,000)

SSIS 44,975,005 48,550,000 3,574,995 20,750,005 22,500,000 1,749,995

CHDC 2,596,139 2,897,500 301,361 - - -

CKHL 1,001,289 1,031,390 30,101 - - -

CLI 2,427,928 2,723,000 295,072 - - -

ILI 868,417 849,375 (19,042) - - -

KSBBL 5,286,931 5,957,952 671,021 - - -

MBL 1,393,203 1,133,000 (260,203) - - -

MKCL 2,758,585 3,197,000 438,415 - - -

NRN 3,297,024 3,366,000 68,976 - - -

PRIN 4,229,067 4,475,268 246,201 - - -

RNLI 1,095,334 1,062,560 (32,774) - - -

RSM 5,993,664 5,993,664 - - - -

SARBTM 4,249,757 4,032,500 (217,257) - - -

SLBBL 364,519 395,715 31,196 - - -

SNLI 3,149,079 3,335,721 186,642 - - -

SONA 1,627,272 1,596,350 (30,922) - - -

TVCL 2,488,126 2,224,075 (264,051) - - -

UMRH 5,254,539 5,160,000 (94,539) - - -

UPCL 3,360,378 2,885,400 (474,978) - - -

Total 175,624,790 178,571,732 2,946,946 112,400,175 109,407,897 (2,992,278)

ANNUAL
352 REPORT 2023-24
7.5. NET GAIN/(LOSS) ON FINANCIAL INVESTMENTS MEASURED AT FVTOCI
The details of unrealized gain/(loss) on financial investment measured at FVTOCI for the FY 2023-24 is given as follows:

FY 2023-24 FY 2022-23
SYMBOL
COST FAIR VALUE GAIN/ (LOSS) COST FAIR VALUE GAIN/ (LOSS)

Avasar Equity
50,000,000 50,000,000 - 50,000,000 50,000,000 -
Diversified Fund
Siddhartha Investment
61,915,159 56,750,558 (5,164,601) 60,053,500 61,915,159 1,861,659
Growth Scheme – 3
Total 111,915,159 106,750,558 (5,164,601) 110,053,500 111,915,159 1,861,659

8. DEFERRED TAX
Deferred tax assets and liabilities have been computed in accordance with NAS 12, Income Taxes and are attributable to the
following:

CURRENT PREVIOUS
ITEMS CARRYING AMOUNT TAX BASE YEAR TEMPORARY YEAR TEMPORARY
DIFFERENCE DIFFERENCE
Property, Plant & Equipment and
26,383,737 13,036,839 (13,346,898) (19,639,533)
Intangible Assets
Investment Securities (FVTPL) 178,571,731 185,274,658 6,702,927 11,634,721
Investment Securities (FVTOCI) 106,750,558 110,053,500 3,302,943 (1,861,659)
Provision for leave encashment 4,457,470 - 4,457,470 3,274,963
ROU Lease Liability 16,730,320 - 16,730,320 23,307,788
Loss on Disposal of Investment - 25,105,037 25,105,037 26,072,276
Total Deductible / (Taxable) Temporary Difference 42,951,799 42,788,556
Tax Rate 30% 30%
Deferred Tax Assets / (Liabilities) as on 15 July 2024 12,885,540 12,836,567
Deferred Tax Assets/ (Liabilities) up to previous year 12,836,567 16,816,060
Deferred Tax (Expenses) / Income during the year 48,973 (3,979,492)
Deferred Tax (Expenses) /Income-PL (1,500,408) (3,420,995)
Deferred Tax (Expenses) /Income-OCI 1,549,380 (558,498)

9. DISCLOSURE RELATED TO MERCHANT BANKING

a. The company has been providing Registrar to Shares (RTS) services to 15 companies, 1 debenture and is depository of
4 schemes under Siddhartha Mutual Fund. For the same, the company has following dividend and refund accounts in
Siddhartha Bank Limited with stated balance as on 15 July 2024:

S.N. ACCOUNT NAME AMOUNT (NPR)

Dividend account

1 Bonus Tax/UNNATI/7778 155,463

2 BONUSTAX/UNNATI/7677 84,213

3 DP/BUDBL/6667 4,712

4 DP/BUDBL/6768 3,764

5 DP/CHCL/7475 9,689,455

6 DP/NGPL/7273 919,178

7 DP/NLIC/7576 144,097

8 DP/SBL/6667 117,200

9 DP/SBL/6768 185,581

10 DP/SBL/6869 86,532

11 DP/SBL/6970 124,985

ANNUAL 353
REPORT 2023-24
 12 DP/SBL/7071 280,817

13 DP/SBL/7677 8,109,678

14 DP/SEF/7677 2,916,289

15 DP/SEF/7778 8,377,613

16 DP/SEF/7879 2,492,553

17 DP/SIGS-2/7677 109,507

18 DP/SIGS2/7778 1,267,136

19 DP/SIGS2/7879 802,782

20 DPCHCL-6768 18,091

21 DPCHCL-6869 13,134

22 DPCHCL-6970 31,923

23 DPCHCL-7071 228,545

24 DPCHCL-7172 393,079

25 DPCHCL-7273 1,039,333

26 DPCHCL-7374 36,863,693

27 DPCHCL-7576 11,549,740

28 DPCHCL-7677 31,229,979

29 DPCHCL-7778 29,133,656

30 DPCHCL-Miscellaneous 15,085,942

31 DPMBBL-7374 1,111,113

32 DPNGPL-7475 667,124

33 DPNGPL7576 682,198

34 DPSBL-7576 32,039,750

35 DPSBL-Miscellenous 904,770

36 DPSEF7576 4,576,013

37 DPSHIVAM-7475 334,273

38 DPSHIVAM-75/76 221,338

39 DPSHIVAM-7677 732,397

40 DPSHIVAM-7778 1,045,488

41 SCL-DP/Bhagawati/7980 896,291

42 SCL-DP/CHCL/7879 29,621,266

43 SCL-DP/CHCL/7980 5,324,662

44 SCL-DP/SBL/7980 33,700,920

45 SCL-DP/SEF/7980 1,691,071

46 SCL-DP/SIGS2/7980 1,120,276

47 SCL-DPSHIVAM-7879 1,085,517

REFUND ACCOUNT

48 RF/IPO/JSLBB 528,238

49 SCL SEOS Redemption Refund 14,461,119

50 SCL.SIGS-1 Redemption Refund 14,202,026

Total 306,404,522

ANNUAL
354 REPORT 2023-24
B. THE COMPANY HOLDS THE FOLLOWING ACCOUNTS FOR THE ISSUE MANAGEMENT OF THE CLIENTS:

S.N. ACCOUNT NAME AMOUNT (NPR)

IPO Account

1 IPO/AKPL/P 617,395

2 IPO/AKPL/SCL 513,554

3 IPO/MKJCL/SCL 5,529,401

4 SCL/NLIC/PUBLIC 2,521,341

Right Share Account

5 RIS/ARDBL 454,406

6 RIS/KBL 50,988

Auction Account

7 AUC/MLBL-PLICLPO 297

8 AUC/NBL/SCL 10,668

9 AUC/SIFC-NMFBS 577

Total 9,698,626

C.THE COMPANY HOLDS THE FOLLOWING REGULAR ACCOUNT FOR DAY-TO-DAY OPERATION:

S.N. ACCOUNT NAME AMOUNT (NPR)

CALL/CURRENT ACCOUNT

1 Everest Bank Ltd. 40,498

2 ICFC Finance Limited. 55,401

3 Jyoti Bikas Bank Ltd. 519,596

4 Kamana Sewa Bikas Bank Ltd. 893,244

5 Kumari Bank Ltd 97,063

6 Mahalaxmi Bikas Bank Ltd. 582,719

7 Manjushree Finance Limited. 10,114,284

8 Muktinath Bikas Bank Ltd. 80,665

9 Nepal Investment Mega Bank Ltd. 46,557

10 NIC Asia Bank Ltd. 1,062,125

11 NMB Bank Ltd. 637,972

12 Online Demat and Meroshare 109,049

13 Prime Commercial Bank Ltd. 805,665

14 SCL NPS 34,170

15 SCL/AMC&MEROSHARE 452,741

16 SCL/Dividend 10,525

17 SCL/MIS/REFUND 39,543

18 SCL-AMC 211,532

19 SCL-DEMAT 156,104

20 SCL-DIS 2,161,665

21 SCL-Mero Share 169,469

22 SCL-Pledge 458,852

23 Shangri-La Development Bank Ltd. 489,248

24 Shine Resunga Development Bank Ltd CA 370,833

25 Shree Investment & Finance Ltd. 135,350

ANNUAL 355
REPORT 2023-24
 26 Siddhartha Bank Ltd. 10,419,561

27 Siddhartha Bank Ltd-DP 1,162,577

28 Siddhartha Capital Ltd-BRT 10,638,515

29 SWFUND 358,783

Total 42,314,306

D. PMS CLIENTS:
The company has been providing Portfolio Management Services (PMS) to 95 individuals and 3 institutional clients. The
product type and investment value of which is tabulated below:

S.N. PORTFOLIO PRODUCT NO. OF CLIENTS NET INVESTMENT AMOUNT

1. Discretionary Institutional Portfolio 3 143,017,372
2. Non-Discretionary Individual Portfolio 3 40,221,246
3. SCL Fixed Return Portfolio 8 35,345,000
4. SCL Growth Portfolio 78 220,023,382
5. SCL Value Portfolio 4 26,094,456
6. SCL Earning Share Portfolio 2 8,449,189
Total 98 473,150,645

10. RELATED PARTY TRANSACTION

a. The gross interest earned in the Bank accounts of SCL maintained in Siddhartha Bank Ltd. for FY 2023-24 is NPR 13,346,474.20.
b. The company has been providing RTS service to Siddhartha Bank Limited for an annual fee of NPR 500,000.
c. The company has been providing Debenture Registrar service to Siddhartha Bank Limited for an annual fee of NPR 100,000.

d. The company has earned fund management and depository fee income of NPR 68,456,312.52 from the Mutual Fund

Operation during the year. The detail of scheme and income is as follows:

SCHEME FUND MANAGEMENT FEE DEPOSITORY FEE TOTAL

SEF 21,864,953 2,915,327 24,780,280
SIGS 2 17,555,239 2,340,698 19,895,938
SIGS 3 12,511,466 1,668,195 14,179,661
SSIS 8,470,971 1,129,463 9,600,433
Total 60,402,629 8,053,683 68,456,312

Similarly, the company has fund management and Depository fee receivable of NPR 6,638,402.36 from Mutual Fund Schemes
under Siddhartha Mutual Fund. The detail of receivable is as follows:

SCHEME TOTAL
SEF 6,447,345
SIGS 2 5,189,886
SIGS 3 3,778,935
SSIS 3,257,791
Total 18,673,957

e. The company has also earned NPR 2,818,380.51 dividend from Siddhartha Investment Growth Scheme 2 (SIGS2) during the
year.
f. Details regarding Key Management Personnel:

ANNUAL
356 REPORT 2023-24
The Chief Executive Officer, Chief Operating Officer, Head - Merchant Banking, Head – Research & Investment, Head – Finance
& Operations and Head-Information Technology & Digital Transformation constitute Key Management Personnel. The details of
Key Management Compensation are as follows:

PARTICULARS TOTAL COMPENSATION REMARKS

Salary, PF, Bonus and Allowances of Management
Short Term Employee Benefits 17,509,699
Level Staffs including CEO and Department Heads

Total amount paid to Board of Directors during FY 2023-24 are as mentioned below:

SN NAME DESIGNATION TYPES OF SERVICES AMOUNT

1 Mohit Kedia Chairman 157,500
2 Rahul Agrawal Director 360,000
Meeting, Telephone and
3 Sher Bahadur Budhathoki Director 157,500
Transportation allowances
4 Kiran Thapa Director 307,500
5 Rishi Raj Gautam Director 210,000
Total 1,192,500

11. CONTINGENT LIABILITIES

Contingent liabilities are possible obligations whose existence will be confirmed only by uncertain future events or present
obligations where the transfer of economic benefit is not probable or cannot be reliably measured. The company entered into
agreements to underwrite the shares to be issued in IPO which are included in the financial statement as contingent liabilities
in respect of underwriting services. The company entered into underwriting agreements with the following institutions:

NO. OF SHARES UNDERWRITING

SN NAME OF INSTITUTION NO. OF SHARES ISSUED
UNDERWRITTEN AMOUNT
1 Solu Hydropower Ltd. 20,000,000 5,000,000 500,000,000

2 Akama Hotel Ltd. 4,500,000 2,850,596 142,529,800

3 Shaurya Cement Industries Ltd. 15,981,500 1,134,173 300,000,100

4 Butwal Power Co. Ltd. 10,000,000 1,454,262 299,999,708

Total 1,242,529,608

12. SEGMENT INFORMATION

The company’s Chief Executive Officer, Chief Operating Officer and the Head of Finance & Operations examines the group’s
performance from a product perspective and has identified two reportable segments of its business:

PARTICULARS FUND MANAGEMENT MERCHANT BANKING OTHERS TOTAL (NPR)

Segment Revenue 68,456,313 97,948,247 38,512,788 204,917,347

Segment Expenses* - - - -

Segment Result 68,456,313 97,948,247 38,512,788 204,917,347

Other Unallocated Expenses (110,020,823)

Income Taxes (28,419,115)

Net Profit 66,477,410

*Expenses for each segment cannot be identified reliably and thus all the expenses have been deducted as unallocated
expenses.

13. RISK MANAGEMENT

The Board of Directors has the overall responsibility for the establishment and oversight of the risk management framework
which is tasked with reviewing wide-ranging risk categories that includes Market, Liquidity, Credit, and Operational Risk.
Functionally, RMC identifies, measures, monitors and controls risk while keeping the Board of Directors informed.

The Entity’s risk management policies are established to identify and analyze the risk confronted by the Entity, to set
appropriate risk limits and controls and to monitor risk and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and products and services offered.

ANNUAL 357
REPORT 2023-24
 A. MARKET RISK balance the avoidance of financial losses and damage to
Market risk is the risk that changes in market prices, interest the business reputation with overall cost effectiveness and to
rate, foreign exchange rate will affect the company’s income avoid control procedures that restrict initiative and creativity.
or the value of its holdings of financial instruments. The The compliance with company’s internal controls and
objective of market risk management is to manage and procedures is supported by a program of periodic reviews
control market risk exposures within acceptable parameters, undertaken by internal audit. The results of internal audit
while optimizing the return on risk. reviews are discussed with the management of the business
units with summaries submitted to the Audit Committee.
B. CREDIT RISK
Credit risk refers to the risk that a counter party will default 14. UNCLAIMED TAX LOSS ON DISPOSAL OF BUSINESS ASSETS
on its contractual obligations resulting in financial loss to Investment in Shares and equity instruments are classified
the company. The company manages the credit quality of as business assets for income tax purpose and the gain
financial assets using internal credit ratings. The company’s and loss on disposal has been treated as per section 36 of
exposure and the credit rating of its counterparties are Income Tax 2058.
continuously monitored.
There was a loss of NPR 26,072,276 booked on disposal of
C. LIQUIDITY RISK business assets i.e. disposal of shares till previous year. The
Liquidity risk is the risk that the Entity will not have adequate loss on disposal of business assets has not been claimed as
financial resources to meet Entity’s obligations as when the admissible expenses on prior years. The loss needs to be set
fall due. This risk arises from mismatches in the timing of off against gain on disposal of business assets only. During
cash flows. The management of liquidity risk includes taking the year, NPR. 967,239 has been booked as gain on disposal
steps to ensure, as far as possible, that it will always have of business assets and carried forward loss is set off against
adequate financial resources to meet its liabilities when due, the gain on disposal of shares of this year. After set off, the
under both normal and stressed conditions, without incurring remaining loss on disposal of business asset amounts to
unacceptable losses or risking damage to the company’s NPR 25,105,037. Hence, deferred tax income of NPR. 7,531,511
reputation. has been recognized during the year and the balance loss is
carried forward for future and can be set off in any financial
year with the gain on disposal of business assets without the
D. OPERATIONAL RISK
time limit on carry forward of losses.
Operational risk is the risk of direct or indirect loss arising
from a wide variety of causes associated with the Entity’s
involvement with financial instruments, including processes, 15. RECLASSIFICATION OF COMPARATIVE FIGURES
personnel, technology and infrastructure, and from external Previous year’s figure in the financial statements is
factors other than credit, market and liquidity risks such as reclassified for better presentation. The details of which are
those arising from legal and regulatory requirements and as follows:
generally accepted standards of corporate behavior. The Reclassification in Statement of Financial Position as on 16
company’s objective is to manage operational risk so as to July 2023.

ANNUAL
358 REPORT 2023-24
 NEW DIFFERENCES
PARTICULARS OLD REPORTING REMARKS
REPORTING (NEW-OLD)

Due to various financial assets shown

Other Assets 658,283 0 658,283 in face of statement of financial
position, for better presentation, other
financial assets of staff advance NPR
143,961 and prepaid staff expense of
Other Financial Assets 0 658,283 (658,283) NPR 514,322 are reclassified into other
assets.

Net Increase in Total Assets 0

Reclassification in Statement of Profit of Loss as on 16 July 2023.

NEW DIFFERENCES
PARTICULARS OLD REPORTING REMARKS
REPORTING (NEW-OLD)
The account head Dividend
Dividend Income from Mutual income from mutual funds (other
0 1,087,166 (1,087,166)
Funds (other than own fund) than own fund) and Dividend
Income on Investment in Mutual
Funds is changed to Dividend
Dividend Income on
0 4,335,970 (4,335,970) income from mutual funds for
Investment in Mutual Funds
better presentation and the
balance of both accounts has
Dividend Income from Mutual been clubbed in new account
5,423,136 0 5,423,136 head.
Funds

The account head Leave and

Leave and Gratuity Expenses 0 2,199,530 (2,199,530)
Gratuity Expenses is changed
to Leave Expenses and Gratuity
Leave Expenses 976,698 0 976,698
Expenses for better presentation.
Gratuity Expenses 1,222,832 0 1,222,832
The account head Postage,
Postage, Telephone, Email,
0 885,638 (885,638) Telephone, Email, Internet is
Internet
changed to Email and Internet
Expenses and Postage and
Email and Internet Expenses 736,881 0 736,881 Communication Expenses for
better presentation.
Postage and Communication
148,757 0 148,757
Expenses

Net Increase in Total Income 0

16.PROPOSED DIVIDEND
The Board of Directors meeting of Siddhartha Capital Limited held on September 09, 2024 has proposed 25% cash dividend
including tax from current year’s profits.

ANNUAL 359
REPORT 2023-24
 RELATED
COMPANIES

SANIMA RELIANCE LIFE INSURANCE

Reliance Life Insurance Limited, which began its operations in
2017, merged with Sanima Life Insurance Company Limited on
23 March 2023. Since the merger, it has been operating under
the name Sanima Reliance Life Insurance Limited.

The organization offers a wide range of high-quality

insurance services to its customers, providing them with both risk coverage and financial stability. It upholds core values
centered on Collaboration, Respect, Innovation, Service and Integrity.

Sanima Reliance Life Insurance Limited remains committed in providing high-quality insurance services, ensuring financial
stability and risk coverage for its customers.

SIDDHARTHA PREMIER INSURANCE LTD.

Founded in 2006, Siddhartha Insurance Company Limited (SIL) was
recognized as one of Nepal’s leading insurance providers. Operating
through 97 branches nationwide SIL offered a comprehensive range
of insurance services, including Property, Marine, Motor, Engineering,
Miscellaneous, Aviation, Micro, Medihealth, Travelers Mediclaim
Policy, and Miscellaneous Accident Risk, catering to individuals as
well as medium and large-scale enterprises. The Company had
employed highly qualified and experienced professionals.

Eventually, Siddhartha Insurance Company Limited merged with

Premier Insurance Company (Nepal) Limited, leading to the establishment of Siddhartha Premier Insurance Company Limited.
Following the successful merger, Siddhartha Premier Insurance Company began its unified operations on March 1, 2023. The
company remains customer-focused, emphasizing long-term customer relationships and striving for complete customer
satisfaction as its primary goals.

AVASAR EQUITY LIMITED

Avasar Equity Limited (AEL) is a Private Equity/Venture
Capital licensed by the Securities Board of Nepal (SEBON).
The company is promoted by Siddhartha Bank and few
other banks as well as prominent personalities from diverse
businesses of Nepal.

As an investment-driven organization, AEL is commitment

to help its investee companies achieve their maximum
potential. AEL supports the long-term success of its investee
companies operating in various industries by connecting
them to an array of resources.

ANNUAL
360 REPORT 2023-24
BRANCH NETWORKS As of 31 March 2025

KOSHI PROVINCE
Aamchowk Dharan Kakarvitta Namche
Megh Raj Bharati Shyam Babu Nepal Sumesh Devkota Kamal Gautam
Bhojpur Sunsari Jhapa Solukhumbu
9842211752 025-539022/23 023-562980/562874 038-540451/52

Beltar Duhabi Kanchanbari Pathari

Bikash Pokhrel Keshab Shrestha Romash Shrestha Tika Bahadur Karki
Udayapur Sunsari Morang Morang
035-440230/31 025-541115/541358 021-466581/82 021-555040

Biratchowk Gadhi Katari Phikkal

Manjit Basnet Hem Kumar Shrestha Ram Kumar Roka Bal Krishna Rijal
Morang Sunsari Udayapur Ilam
021-545523/24 9801862200 035-450434 027-540353

Biratnagar Gaighat Khandbari Rajmarga Chowk

Surya P. Sharma Upadhyay Sunil Pokharel Nimesh Ghimire Ramesh Khatri
Morang Udayapur Sankhuwasabha Jhapa
021-572901/02 035-423618/19 029-563172 023-571856/57

Birtamod Gauradaha Lukla Surunga

Subhash Shrestha Om Prakash Dhital Surya Narayan Dhamala Nutan Giri
Jhapa Jhapa Solukhumbu Jhapa
023-590127/535760 023-480374 038-550300/01 023-553358/59

Chandragadhi Ilam Mahendra Chowk Taplegunj

Sanjaya Mishra Promod Niraula Samir Kumar Chemjong Ghanendra Gurung
Jhapa Ilam Morang Taplejung
023-453939/98 027-523766 021-590314/15 024-461056/57

Damak Inaruwa Makalu Urlabari

Mukti Nath Bharati Amar Rana Magar Sanjay Nepal Umesh Lamsal
Jhapa Sunsari Sankhuwasabha Morang
023-585127/575206 025-565262/565363 038-54051/52 021-542617/18

Dhankuta Itahari Makalu

Roshan Shrestha Pankaj Yadav Sanjay Nepal
Dhankuta Sunsari Sankhuwasabha
026-523511/12 025-584721 027-691238

MADHESH PROVINCE
Adarshakotwal Chandrapur Hariwan Kshireshwor
Ravi Prakash Gupta Kailash Chaudhary Salam Singh Waiba Shiva Kumar Yadav
Bara Rautahat Sarlahi Mahendranagar
9855048856 055-540630/31 046-530474 041-540428/87

Bahudarmai Devtal Janakpur Lahan

Aniket Kumar Yadav Rupsen Prasad Jaishwal Arna Bahadur Balampaki Suresh Raj Neupane
Parsa Bara Dhanusa Siraha
9855038414 9802073728 041-590871/72 033-563969/70

Bardibas Garuda Janakpur Malpot Lalbandi

Niraj Raut Ajay Kumar Chaudhary (Extension Counter) Suvash Kumar Pandey
Mohattari Rautahat Dhanusa Sarlahi
044-550640/41 055-565435/37 041-590126 046-501369

Bidhyapati Chowk Gaushala Kalaiya Madhavnarayan

Sushant Sah Bibek Kumar Dutta Manmohan Lal Sah Rama Shankar Chaudhary
Janakpur Mohattari Bara Rautahat
041-590112/13 044-556193/556253 053-551920 9801862288

Birgunj Golbajar Kalyanpur Mirchaiya

Matrika Prasad Khanal Rakesh Koirala Ram Prasad Timalsena Omkar Lamichhane
Parsa Siraha Saptari Siraha
051-531011/22 033- 540511/12 031-540098/99 033-550084/550216

ANNUAL 361
REPORT 2023-24
 Murlichowk Ramananda Chowk Ramgopalpur Simara
Bharat Paudel Ajay Kumar Yadav Vijay Kumar Mandal Rabin Dhakal
Parsa Dhanusa Mohattari Bara
051-520136/522634 041-527550/59 044-410083/84 053-521940/41

Rajbiraj
Ram Prakash Singh
Saptari
031-532053/54

BAGMATI PROVINCE
Anamnagar Chyamhasingh Hattigauda Kapan
Anu KC Kalpana Prajapati Anuj Malakar Shobha Kanta Paudel
Kathmandu Bhaktapur Kathmandu Kathmandu
01-5706151/52 01-6620380 01-4374580/4379388 01-4822489/4822913

Balkot Dhadingbesi Hattisar Kirtipur

Dipendra Thapa Om Kumar Shrestha Sushmita Pant Sarina Shrestha
Bhaktapur Dhading Kathmandu Kathmandu
01-6639622/23 010-520093/520180 01-5770719 01-4334933

Baluwakhani Dhaneshwor Hetauda Kuleshwor

Isha Adhikari Bhawana Shrestha Suraj Lama Surendra Pandey
Kathmandu Kathmandu Makwanpur Kathmandu
01-4164390/91 01-5158436/37 057-526767/68 01-5384110/5921208

Banepa Dhapasi Ichangunarayan Kumaripati

Rohit Kumar Regmi Reshu Adhikari Pushkar Pandey Lalita Adhikari
Kavre Kathmandu Kathmandu Lalitpur
011-663925/55 01-4986790/4987890 01-4880813/4881906 01-5408648/50

Battar Dudhauli Imadole Lazimpat

Pradeep Lohani Pashupati Bikram Thapa Ajit Shrestha Bishnu Prasad Sharma
Nuwakot Sindhuli Lalitpur Kathmandu
010-561946/47 047-412021/22 01-5201022 01-4002274/4002134

Bhaisepati Ganeshthan Jawalakhel Lubhu

Shova Shiwakoti Shristi Pradhan Anish Ghimire Sharmista Karjee
Lalitpur Kathmandu Lalitpur Lalitpur
01-5913305 01-4981561/4963504 01-5453423/24 01-5916624/26

Bharatpur Gatthaghar Jorpati Madhyapur Thimi

Sandip Barakoti Roshan Parajuli Pem Chhiri Sherpa Badan Maiya Twayana
Chitwan Bhaktapur Kathmandu Bhaktapur
056-595981/60/595165 01-5639435/6630302 01-4910788/96 01-6633441

Bode Gokulganga Kadaghari Maharajgunj

Neelam Bade Pradip Kumar Karki Meera Gautam Rita Dahal
Bhaktapur Ramechhap Kathmandu Kathmandu
01-6639211 044-692091 01-5900993/94 01-4720709/04/4720796

Bouddha Golanjor Kalanki Mangalpur

Lasu Subba Tombapo Deepak Paudel Bijay Raj Subedi Paras Khanal
Kathmandu Sindhuli Kathmandu Chitwan
01-4590797 047-692041 01-5219570 056-591911

Chabahil Gongabu Kalimati Mulpani

Sabin Shrestha Puspa Raj Aryal Lok Bikram Thapa Bhagabat Dhungel
Kathmandu Kathmandu Kathmandu Kathmandu
01-4582795/4592483 01-4989226/27/4989203 01-5383579/5375683 01-5917619/20

Chapagaun Gwarko B & B Kalopul Naradevi

Sushant Thapa (Extension Counter) Reeya Joshi Monica Manandhar Khanal
Lalitpur Anisha Pradhan Kathmandu Kathmandu
01-5265684/85 Lalitpur 01-5007621 01-4541983/84 01-5363919/20

Charikot Hattiban Kantipath Narayangarh

Uttam Karki Yushma Singh Binaya Shrestha Min Bahadur Chaulagain
Dolakha Lalitpur Kathmandu Chitwan
049-421121/421249 01-5915629/30 01-5326002/5330234/ 056-596127/28/29
5345895

ANNUAL
362 REPORT 2023-24
Narephant Parsa Satdobato Tandi
Anita Kumari Lamsal Sanjan Kumar Singh Priya Shrestha Ramesh Paudel
Kathmandu Chitwan Lalitpur Chitwan
01-5149221/01-5149311 056-583400/583311 01-5151327/5151828 056-563143/45

Nayabazar Patan Shankhamul Thamel

Bindhya Shrestha Rabi Shrestha Usha Acharya Pooja Bajracharya
Kathmandu Lalitpur Kathmandu Kathmandu
01-4980212 01-5005531/33 01-4791396/4791516 01-4701340/42

Nepaltar Pharping Sinamangal Thankot

Amrita Adhikari Ujjwal Khadka Chhetri (Extension Counter) Rudra Prasad Pokharel
Kathmandu Kathmandu Shera Pant Kathmandu
01-4965475/4955939 01-4710569/4710691 Kathmandu 01-4315129/30
01-5910575
New Road Putalisadak Tinchuli
Shila Tajhya (Extension Counter) Sindhuli Ngima Gyalzen Sherpa
Kathmandu Niran KC Dan Bahadur Karki Kathmandu
01-5324616/5339535 Kathmandu Sindhuli 01-4915734 /4917233
01-5327796/5364857 047-520747/48
Newroad Gate Tinkune
Binita Shrestha Ramkot Sundhara Sweeti Sijapati
Kathmandu Dipak Bahadur Mahara Alina Shakya Kathmandu
01-5913919/20 Kathmandu Lalitpur 01-4111881/4111941
01-4039690 01-5454498/78
Old Baneshwor Tripureshwor
Uddhab Dhakal Roshi Suryabinayak Dezy Shahi
Kathmandu Shushil Sapkota Sunita Bhuju Kathmandu
01-4579298/4592850 Kavre Bhaktapur 01-5332504/09
9801606375 01-6620092/93
Padampur
Sunil Khanal Saraswatinagar Swoyambhu
Chitwan Urmila Baidhya Rikesh Shrestha
9849142084 Kathmandu Kathmandu
01-4822728/30 01-5247255/56

GANDAKI PROVINCE
Bagar Buddha Chowk Dumre Lekhnath
Hari Bahadur Bhat Keshab Raj Poudel Shankar Khanal Teertha Raj Ghimire
Kaski Kaski Tanahun Kaski
061-577747/48 061-435505/06 065-580197/98 061-561838/39

Baglung Chipledhunga Gaidakot Parshyang

Ganesh Pathak Binaya Pahari Kamal Bhandari Anila Gurung
Baglung Kaski Nawalpur Kaski
068-522933/34 061-543725/526616/581133 078-501739/503183 061-419512/419195

Beni Daldale Gorkha Bazar Pokhara

Narayan Sapkota Tribikram Lamichhane Jivan Baniya Jyotindra Poudel
Myagdi Nawalpur Gorkha Kaski
069-521257 078-575071 064-420944 061-553338

Besishahar Damauli Hemja Waling

Janak Adhikari Sudhir Wagle Binod Raj Poudel Gopi Krishna Regmi
Lamjung Tanahun Kaski Syangja
066-521369/70 065-564790/565690 061-400574 063-441003

Binayi Triveni Devghat Kawasoti

Mahendra Godar Sabitri Kharel Suraj Giri
Nawalparasi Tanahun Nawalparasi
078-416186/90 056-500094/95 078-541133

Birauta Dulegauda Lakeside

Pradeep Pokharel Bidur Adhikari Anirudra Baral
Kaski Tanahun Kaski
061-450185 065-414422/23 061-454414

ANNUAL 363
REPORT 2023-24
 LUMBINI PROVINCE
Amarpath Gorusinghe Lamahi Parasi
Sujit Bhari Umang Pakhrin Subash Shahi Krishna Prasad Gautam
Rupandehi Kapilvastu Dang Nawalparasi
071-531650 076-545275 082-540905 078-520547/520647

B.P. Chowk Jitpur Lumbini Putha Uttarganga

Dilip Pangali Kishor Bhattarai Kiran Kumar Gautam Tej Singh Kudmal
Banke Kapilvastu Rupandehi Eastern Rukum
081-530076/532231 076-550425 071-580397 9857856677

Bansgadhi Jumri Manigram Sauraha Pharsatikar

Roshan Bist Hari Prasad Neupane Abhishek Kumar Thapa Ramesh Raut Kshetri
Bardiya Pyuthan Rupandehi Rupandehi
084 -400219/21 086-460153/54 071-560806/07 071-400217/18

Bardaghat Khaireni Marchawari Taulihawa

Kamal Poudel Rabin Subedi Hari Narayan Chaudhary Anmol Shrestha
Nawalparasi Rupandehi Rupandehi Kapilvastu
078-580607/08 071-577350/577058 071-622514 076-560678/79

Bhairahawa Khajura Nepalgunj Tulsipur

Kapil Kafle Ratan Agrawal Kiran Rana Magar Kiran Acharya
Rupandehi Banke Banke Dang
071-573645/573646/573732 081-560114/15 081-537933/34 082-521707/08

Butwal Kohalpur Newroad Nepalgunj Yashodhara

Chandra Dev Poudyal Nirmal Bam Manoj Kumar Tiwari Tarapati Ghimire
Rupandehi Banke Banke Kapilvastu
071-554540/41 081-542040/41 081-520431 076-620236

Chandrauta Kotihawa Palpa Yogikuti

Bhim Bahadur KC Kamal Koirala Narayan Paudel Lakshmi Prasad Gyawali
Kapilvastu Rupandehi Palpa Rupandehi
076-540521/22 071-514156 075-521567 071-438607/14

Ghorahi Krishnanagar
Migal Singh Thakuri Kiran Ghimire
Dang Kapilvastu
082-563174/75 076-520655/56

KARNALI PROVINCE
Dailekh Jumla Musikot Surkhet
Roshan Raj Dahal Chitra Raj Sapkota Opendra Bista Ranjan Koirala
Dailekh Jumla Western Rukum Surkhet
089-410060/61 087-520673/520505 088-530380 083-523855

SUDURPASCHIM PROVINCE
Attariya Campus Chowk Geta Eye Hospital Mahendranagar
Dharma Raj Ojha Bhuwan Prasad Pant (Extension Counter) Birendra Singh Karki
Kailali Kailali Hemlata Bhatt Kanchanpur
091-550516/550031 091-523014/15 Kailali 099-520163/64
9810704264
Bauniya Dadeldhura Tikapur
Prakriti Shant Thakurathi Tirtha Bahadur Jhukal Lamki Prakash Tiwari
Kailali Dadeldhura Yogendra Bhandari Kailali
091-404118/19 096-410014/15 Kailali 091-561163/64
091-540536/37
Budiganga Dhangadhi
Hem Raj Joshi Nitesh Shrestha
Bajura Kailali
097-594222 091-527463

ANNUAL
364 REPORT 2023-24
 SERVICE
NETWORK

FOOTPRINTS IN

EXTENSION
54 191
DISTRICTS BRANCHES
5
COUNTERS

REPORT 2023-24
365ANNUAL
 ANNUAL
366 REPORT 2023-24