Central bank to seek details of post-merger complications
KATHMANDU, APR 10 -
Nepal Rastra Bank (NRB) is preparing to seek details of post-merger complications from financial institutions that have combined to help formulate suitable measures to avoid them.
NRB has planned to ask for details amid reports of the tendency of senior staff to promote groupism in a merged financial institution.
According to central bank officials, they will soon write to financial institutions that have merged to provide details of their problems. “The main objective is to study how post-merger complications are affecting the management of the merged company,” said a senior NRB official.
Over the last two years, four mergers have taken place including a merger between Narayani Finance and National Finance to become Narayani National Finance Company.
Likewise, H&B Development Bank came into existence after a merger between Himchuli Finance and Birgunj Finance. Kasthamandap Finance amalgamated with Shikhar Finance to become Kasthamandap Development Bank. A merger between Business Development Bank and Universal Finance resulted in the formation of Business Universal Development Bank.
Officials of merged financial institutions, however, said that they are not facing any big problems. Board director of Narayani National, Suresh Kumar Pudasaini, said altho-ugh some friction arose among the staff due to different working cultures, the problem has now been solved completely.
“We feel that the biggest challenge is to manage human resources,” he said. “It is better to assess the human resources too while conducing a due diligent audit to determine the share value of a company.”
Another point he made was that a merger does not necessarily reduce the operating cost. “We have two offices—corporate and operation—and as staff from both the finance companies were adjusted, there remained little chance of reducing costs,” he said. Narayani National is the first merger in the country between two finance companies promoted by two groups.
Meanwhile, Umesh Regmi, who is set to become deputy general manager of Kasthamandap Development Bank, said that no problems have appeared in the company after the merger. “As it is yet to start business transactions, no problem has appeared so far,” said Regmi, who was the general manager of Shikhar Finance before it was merged with Kasthamandap Finance.
The development bank is going to start its post-merger operation from April 13. “There is no problem in staff management as no employee has been laid off and the board members also made sacrifices,” he said.
MBL, Standard Finance move closer to merger
Machha-puchchhre Bank Limited (MBL) and Standard Finance have moved ahead with their merger plan with both calling a special general meeting (SGM) to get it okayed. Standard Finance is holding its SGM on April 22 while Machhapuchchhre is holding it on April 30. If the merger happens, it will be the one of the biggest one in Nepal’s financial history as the paid-up capital of the new company will reach Rs 2.65 billion. Machhapuchchhre has a paid-up capital of Rs 1.62 billion while Standard has a paid-up capital of more than Rs 1 billion. Standard’s chief executive officer Umesh Singh Bhandari said that the new company would have a staff strength of 600 and 54 branches across the country.
Source: Kantipur
