Grameen Bank's integrated business by mid-July, listing by mid-August

ShareSansar, June 8:

All the five state-run Grameen Bikas Banks, which are currently in the merger, are planning to start an integrated business by mid-July, and to get the scrip listed by mid-August.

The DDA for the merger of these banks held back in May last year had ascertained the swap ratio at 1.02 of Purbanchal, 1.18 for Madhyamanchal,  275.8 for Pashimancal,  77.78 for Madhya Pashimancal and 1.02 for Sudur Pashimancal Grameen Bikas Bank, in which  the central bank has the highest stake.

Talking to ShareSansar, Chief Executive Officer of Pashimanchal Grameen Bikas Bank Dharma Raj Pandey, who will be the CEO of the merged Grameen Bikas Bank Limited, said that the paid-up of the merged entity will stand at Rs 40.70, after adjusting 15 percent bonus share recently endorsed by Pashimanchal.

“In the total paid-up capital, Pashimancal alone is contributing Rs 29.08 crore,” Pandey further said, adding that immediately after the integrated business starts the government will be channeling Rs 15 crore offered by the World Bank.

The class ‘D’ BFIs had jointly applied with the central bank for the integrated business on April 25.

Pandey also informed that plans were already afoot to further raise the paid-up by Rs 10 crore.

“Our target is to shore up the paid-up capital to Rs 65 crore and the authorized capital to Rs 1 arba in the near future,” he added.

After the merger, public holding in the Grameen Bikas Bank will stand at around Rs 10 crore and the rest of the stake will be with the government, central bank and a few commercial banks.

The merged entity will have an impressive coverage of 56 districts with 183 branches, and the balance sheet-size of Rs 3.65 arba.

The five grameen bikas banks had signed a MoU for the merger back on October 11, 2012.

Planning profit within four years

When asked about major plans following the integrated business, the incumbent CEO of Pashimanchal that has been posting good profit, said that there overarching goal is to ensure that the merged entity started to make good profit within four years.

“We are planning to get chunk of the soft loan, besides executing VRS for the overstaffed bank, and setting up a regional office in the capital, inter alias for the same,” Pandey explained.

Currently the combined loss of the banks stands at 19.80 crore and quarterly loss at loss is Rs 5.70 crore.

During the merger process, shares of Pashchimanchal, which is the only regional Grameen Bikas Bank among the five to make profit,  was priced at Rs 140 per unit, while Purbanchal and Sudur Pashchimancal Bank's per unit was valued at merely Rs 1.02 each.

Likewise, Madhyamanchal Grameen Bikas Bank’s per unit share was valued at just Rs 1.17 and Madhya Pashchimanchal Grameen Bikas Bank was priced at Rs 77.

The merger initiated by the central bank to make a strong national level development bank to serve the poor could be completed by the end of this fiscal year, according to the head of the merger committee Jagat Pokharel.

Pashchimanchal starts distributing bonus share

Issuing a notice today, Pashchimanchal Grameen Bikas Bank has stated that it has started distributing certificates for the 15 percent bonus shares pledged by the bank for the last fiscal year.

The bonus shares can be collected from the office of its RTS, Growmore Merchant Banker Limited from 10:00 AM to 3:00 PM from Sunday to Thursday, and from 10:00 AM to 1:30 PM on Friday.