It is clear from Table 1 column 3 that the average
capital adequacy ratio of two public banks NBL and
RBBL were negative due to the heavy accumulated
losses. Due to the inherent problems and big chunk of
NPA, the public sector banks suffered from massive
losses in the past, which had heavy impact on their
capital adequacy. Although, the public banks had started
to improve their financial condition, it is very different from
an acceptable standard.
However, ADBL capital adequacy ratio was seemed to
be positive but ADBL was also not achieved the NRB
requirement. Most of the joint venture banks have
accomplished the capital adequacy ratio as directed by
NRB. The banks with non-compliance were NBBL (-
5.58%). In addition, average capital fund ratio of joint
venture banks during the study period hang around 14%.
This was higher than the minimum ratio specified by
NRB. This clearly implies that joint venture banks are
complying with the directive of NRB on the requirement of
the capital base of commercial banks.
All the selected domestic private banks had complied
with the statutory capital adequacy ratio of 10%. The
banks with non-compliance were LBL (5.4%) and NCCBL
(4.52%). As transactions of the bank increases, the risk
weighted assets also increases in the same manner