Central bank approves two BFI merger proposals

KATHMANDU, JUN 22 -

The Nepal Rastra Bank (NRB) has given final approval to two merger proposals.

A central bank board meeting on Thursday decided to give final consent for the merger between Global Bank, IME Financial Institution and Lord Budhha Finance, and between Standard Finance and Machhapuchhre Bank.

With the NRB approval, Global Bank has become the first class ‘A’ financial institution to lead the merger of three institutions. Global Bank had first signed a memorandum of understanding with IME for the merger and later with Lord Budhha. A special general meeting of Global Bank held in the second week of May had given nod to the merger plan.

Global Bank Chairman Chandra Prasad Dhakal said the merger process would be completed in the next two weeks. After the merger, the new entity will be named Global IME Bank and will have a paid-up capital of around Rs 2.20 billion. Dhakal will continue to lead Global Bank as chairman and current CEO Ratna Raj Bajracharya will also retain his position.

Likewise, the merger between Standard Finance and Machhapuchhre Bank Limited (MBL) will produce a new entity with a paid-up capital of Rs 2.5 billion. A special annual general meeting of Standard Finance had endorsed the merger proposal in the third week of April.

After its bid to upgrade itself into a commercial bank by its increasing paid-up capital failed due to changed central bank policy, Standard Finance opted for merger. The company had even increased its paid-up capital to Rs 1 billion from Rs 166.9 million by issuing 1:5 rights shares.

So far this year, Himchuli Development Bank and Birgunj Finance have received NRB final merger approval to form H&B Development Bank. Other mergers include Business Development Bank-Universal Finance and Kasthmandap Development Bank-Shikhar Finance.

Source: The Kathmandu Post